Jiesen tries to take over the world

[New-born baby]

OGF--on sale again

Sold the extra 1% in WSB for 9. I am thinking to move this to OFG, at its current rock-bottom price, or just add it to my purchase of the next $$MM pick, depending what it is.

Yesterday's spike in OFG resulted in today's sell off: down the same 75 cents it was up yesterday.

[jiesen]

sold CME for 259

also, CME just hit my stop at 259, so I sold the rest of my CME. thanks again for the 15% gain, $$MM!!!

You are HUUUUUUUUUUUUUUUUUUUUGE!

[jiesen]

sold some WSB for 9

reduced my XING position again (~1%) and put it into WSB, since if $9 is a great price, $8 is even better. I'll start worrying if it hits 6.

C'mon, it's a bank! how can a bank with $50M in net assets earning $20M per year be worth less than $60M?

yeah, the bad construction loans are troubling, but they don't have ALL their assets tied up in them...

http://www.twsb.com/up_docs/10qjan.pdf

Sold the extra 1% in WSB for 9. I am thinking to move this to OFG, at its current rock-bottom price, or just add it to my purchase of the next $$MM pick, depending what it is.

[jiesen]

I've put a stop in my CME position today at the $$MM target, just to try something new. I already locked in the gain for 1/2 the position when it hit the target earlier, so I'll risk a gap-down overnight, since I think this run still may have enough legs to get me another 10% or so before the next HUGE pick comes. Of course, I fully expect my stop to get triggered today, but it'd be nice to see this run continue, and make some $$ on it at the same time!

[New-born baby]

Excellent!

ok, well I didn't manage to do as much tonight as I had hoped on the SCHN research, but I'll tell you what I think of it so far:

http://finance.yahoo.com/q/ks?s=SCHN

mostly I'm using data available from Yahoo! so you'll have to take it with a grain of salt... this stuff is usually pretty stale.

book value is what I'd look at first. it's a pretty good sign for me that P/B is 1.4, though I'd prefer it to be a bit lower, perhaps 1.2 (if you are Ben Grahm, that's the maximum), before I'd really want to buy it without looking at too many other factors.

debt seems to be quite under control, and the profitability is certainly there, with $5 EPS. The major question I would have is whether they can keep up that profitability, or even improve it. So far they've been doing great, with 20% profit margins, 30%+ rev growth, and almost a 100% earnings growth. But can they keep that growth up? Will high energy costs finally catch up with them? Those are the details I'd need to find out before I would put my money into SCHN at a 1.4 P/B. It may be different at 1.0 or 1.1.

I'd need to have a much better understanding of the steel industry to buy this at its current price. I couldn't tell you whether there will be a continuing demand increase for steel at these higher prices or not. I know the developing world can't get enough of the stuff, but how much will they be able to spend, really? The limit may be fast approaching, so you need to be careful investing in a company that is so sensitive to these issues... and maybe find out more about this market before sinking money into it.

It looks like earnings are due out for SCHN fairly soon. A good idea, imo, would be to wait for any decision on this until after earnings are out and you can see how the business is actually doing right now, with the increased energy costs. You need to remember that steel is a cyclical industry, and very dependent on the cost of energy. Since oil is at an all time high right now, it makes sense that profits here should take a hit. If somehow SCHN manages another quarter of increased revenues and profits despite these increasing costs, then I might think about buying... but I'd still demand a good price for this. I believe that the price you're seeing here, although it may look tempting, is lower than most companies with these stats for a reason-


from TMF:
----

http://www.fool.com/news/commentary/2005/commentary05051206.htm?source=eptyholnk303100&logvisit=y&npu=y

Mr. Market is not a complete idiotI know, we give moody Mr. Market a lot of grief around here at the Fool. We call him irrational, nearsighted, and a thousand other derogatives. But he's not a complete idiot. He's been around a lot longer than you or I have. And over that time, he's developed a pretty good feel for how certain industries are affected by cyclical trends over the long term.

So poke fun at the market if you will (really, try it -- it's fun!). But at the same time, listen to what it's telling you when it prices companies such as Schnitzer Steel (Nasdaq: SCHN), Ryerson Tull (NYSE: RT), and Commercial Metals (Nasdaq: CMC) all at price-to-earnings ratios (P/Es) of less than 10. I mean, really, the average S&P 500 company is selling for a historically pricey 20 times earnings right now. Yet in the steel industry, year-over-year earnings increases in the hundreds (if not thousands) of percents merit earnings multiples of just half that? Something's up here, Fools. And that something is the market telling you that the steel earnings you see today are ephemeral, the relative increases over last year's numbers -- anomalies.

In short, through the language of earnings multiples, Mr. Market is whispering in your ear those famous words: "Don't believe the hype." A downturn is coming. These earnings will melt away and turn into losses. We may not know exactly when, but the cycle of boom and bust is eternal.

-----

I think they're giving a fairly accurate assessment there. They forgot to mention that

$$MR. MARKET$$ IS HUGE!!!!

but anyway, if I bought one, I'd make sure to get it on a good dip, set a wide stop, or none at all... and be prepared to ride it out through at least several years of a steel bust, since we've undoubtedly seen a huge steel boom over the last few years.

http://finance.yahoo.com/q/bc?t=5y&s=SCHN&l=on&z=m&q=l&c=mt+x

If you had to pick a steel play, you could definitely do worse than this one. Again, it would be prudent to wait for earnings first, and if they're good, and you get it right away, I wouldn't be surprised if you could scalp a quick 10-20% right away, but if not, then a buy and hold for this one might work out just fine.

It's tougher for me to pick a buy price for this, since I most likely wouldn't buy a stock like this to begin with, but if I had to, I'd say around $20-21 would be a good price to grab some SCHN. If somehow it did drop to that price, though, there may be a "what's wrong with it then?" thought going through my mind that'd make me want to look a bit harder at it first. If it happened after the earnings came out on the lower end, I'd be even more hesitant to buy. But if earnings are good, and someone wants to give away their stock at a 1.2 P/B and a P/E of 4, I'd say go ahead and buy it.

I'm sorry if my analysis is too bland or full of platitudes, but it's all I could come up with in the time I had to devote to it. It probably doesn't really help much, since it's mostly just obvious anyway... but please don't base any decision to buy SCHN on what I just posted, keep in mind that I'm far from qualified to analyze any company, let alone a steel company.

Written up with the quality of a Mr. Market pick! Excellent work, Junkyard Dog!