Month: April 2013

C.H. Robinson Worldwide (CHRW)

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Source: Company Annual Report (2010)

C.H. Robinson Worldwide (CHRW) is a service company, which provides freight transportation services and logistics solutions to companies. It is a multimodal transportation services and logistics solutions, operates through a network of branch offices in North America, Europe, Asia, South America, and the Middle East. C.H. Robinson Worldwide services include supply chain consulting and analysis, freight consolidation, core carrier program management and information reporting. The company’s other services include sourcing services, contract Warehousing and fee-based information services. The Sourcing services business is primarily the buying, selling, and marketing of fresh produce. It also provides Transportation and Logistics Services: Truckload, less than Truckload, Intermodal, Ocean, Air and Other Logistics Services. C.H. Robinson Worldwide was founded by Charles Henry Robinson in 1905 and is headquartered in Eden Prairie, MN.

Business Model Analysis

The long-term growth trend is 10%. And we could pretty much set our watch to it … with allowances for recessions now and then. (If you squint, you can see a recessionary gulp in 2012. See the blip in the EPS plot for 2012 vs. the trend.)

The price bars are drifting ever closer to the long-term EPS trend, underscoring the potential buying opportunity.

Chronicle

Points of View

There’s a few chinks in the armor for CHRW, but no deal breakers. The “bearish sentiment” and negative price pressure is probably reflective short-term recessionary concerns — but we’re in this for the long haul. (Yes, an economic recession will deliver a dent much like it did in 2008-2009.)

Overall sentiment is a little weak. Note the Motley Fools CAPS all-stars are not all that high on CHRW (34th percentile).

Gold: Tarnishment In Progress?

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Photo Credit: World Bank Photo Collection via Compfight cc

Maybe it’s the unshakable image of Peter Schiff on Fox Business pulling a Hersheys-like gold bar out of his wallet — and demonstrating that much like a chocolate bar — you can break off smaller $50 pieces! Maybe it’s visions of bitcoins, tulips or beanie babies dancing in my head?

Whatever is dancing, although we generally reserve these long-term RSI breaks and disruption zone charts for stocks, Gold (GLD) … this one’s for you.

I can’t shake the image of how UNPROTECTIVE Midas was during the 2008 meltdown. Sure, it held up fairly well for a scant few months following Halloween 2007 — but it gave up the ghost a scant few months thereafter, rendering this asset allocation recipe pretty unreliable when it was needed most. (To be fair, Midas was far from alone in disappointing by asset class.)

So my question is, “What makes you believe that Midas would be any more protective during the next market meltdown?”

Core Diem: A Tasking Portfolio

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If you’ve been following along since last October, you’ve probably seen a number of selections that seem to have been snake bite victims. The most recent injured stock is Infosys Tech (INFY) down some -21% this morning as the company admits that they’re tired of “lingering economic malaise.” We’ll be watching the 16-17 analysts who cover INFY to see if forecasts for 2013 and 2014 weaken materially in days ahead.

As I shared with Cy Lynch this morning, in honor of one of the best lines delivered by Ricardo Montalban (Khan) with respect to his adversary William Shatner (Captain Kirk) this portfolio TASKS ME

The outperformance accuracy of Core Diem is now 13% with a relative return of -11% after this morning’s carnage. (Cognizant Technology lost ground in sympathy with their industry peers at INFY.) Ugh.

But this condition is really nothing new — as Cy consistently and persistently reminds (as do Ken Kavula and Hugh McManus quite often) — TIME is not a 4-letter word. Our mettle is tested.

This current market surge is full of flaky stakes making new highs. As a case in point, today’s rage is Rite-Aid (RAD) with their quality ranking of ZERO as the stock price soars from $1.50 to $2.25. Nope, there’s no decimal place missing.

We’ll continue to add a stock per day to Core Diem going forward and look forward to the day when we celebrate a positive relative return.

Flake at will. We continue to believe that seeking high-quality companies when they’re comfortably in the sweet spot (our version of Graham’s margin of safety) is still a pretty good idea and that TIME is on our side.

Core Diem Model Portfolio

Chipotle Mexican Grill (CMG)

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Benzinga’s Tim Parker asks the best questions.

See: Chipotle, Buy Sell or Hold — Order Up!

As Tim points out, noted and notable investing celebrities David Einhorn and Jeff Gundlach both have questioned the future of Chipotle. In fact, they diss the burrito bonanza and compare Chipotle to Taco Bell, hissing a little while they nudge the guacamole around on their plates.

I question whether either of them have ever been to a Chipotle. The restaurants are pretty spartan … and last time I checked, there wasn’t any sign of wait staff adorned with towel over arm, refilling my water glass every time I take a sip. Maybe it’s the styrofoam vs. glass which makes it a little more challenging to detect water level?

Nothing against either one of these guys … not at all. They’re both great sources of ideas and inspiration and they both have a 3-taco plate full of notable achievements. But here I have to go with the college students and long lines forming at Chipotle to think that perhaps — just maybe — they’re a smidge wrong about this one.

Our take: Hold with a return forecast that’s pretty close to the average return for all stocks. (6-7%). And given the Speedy Gonzalez behavior and life cycle position of Chipotle, we’ll expect a siesta or two going forward… and yes, things will calm down over time. It’s a natural thing. And when it does, the stock price gets adjusted like a palate recovering from a hot sauce barrage from time to time.

Technical Analysis

As Tim suggests, the technical rendition looks pretty good. Here’s the really long-term look, focusing on monthly characteristics. There’s no clear and present danger of an RSI break (unlike the previous chapters) right now.

Shopping By Sector: Technology En Fuego

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Photo Credit: Tc Morgan via Compfight cc

Where to shop these days?

Start by recognizing where NOT to shop and that’s probably the utility sector. The utility stocks have been en fuego. Don’t shop among the ashes of a bonfire, shop where a flammable pile is smoldering — but distinguish ashes from ignition.

The accompanying table has been sorted from highest potential to lowest potential based on projected annual return (PAR) — the return forecast for the ten traditional sectors from S&P.

Technology stocks worth a closer look: Apple (AAPL), Cognizant Technology (CTSH), Google (GOOG), EMC (EMC), Oracle (ORCL), Qualcomm (QCOM) and Intel (INTC).

Keep in mind that the smoldering might take a while as the often unfriendly (to Tech stocks) days of summer swoop in — for investing for the long term …

Sector gps 20130411

Fastenal (FAST): Look Out Below?

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Fastenal (FAST) has broken below a relative strength index of 70 recently — and bears watching.

A little weakness in today’s earnings report could  go a long ways (price swoon) as the conditions are a little more vulnerable than usual to a price correction.  As Dan Hess pointed out, other companies (e.g. MSC Industrial) are displaying similar fundamental weakness in their operating results.

As always, this long-term community favorite should have plenty of leash when it comes to portfolio-centered decisions.  Treat it as core and hold unless Fastenal (FAST) is your best challenge candidate for your portfolio.

Fast 10yr 20130410

Point of View: Update

Fast pov 20130410

Danaher (DHR): Look Out Below?

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Danaher (DHR) nudged up to a relative strength of 70+ but has subsided back to 66.7.

The following analyses suggest a higher potential/probability of some short- and intermediate-term price disturbance … but depending on portfolio-centered decisions, likely a hold in most portfolios.

But a stock price speed bump wouldn’t surprise us.

Dhr 10yr 20130410

Danaher (DHR) is a consensus hold based on the following perspectives:

Dhr pov 20130410

Business Model Analysis

It’s pretty clear why Danaher (DHR) has been a long-time community favorite and charter member (since 9/30/2005) of the MANIFEST 40.

Say it with me: “Up, Straight and Parallel”

The analysis supports a sales growth forecast of 7-10%, consistent with the opinions of Value Line, Morningstar and S&P.

Dhr model 20130410

Chronicle: Return Forecast and Quality EKG

Dhr chronicle 20130410

MANIFEST 40: More Stuff (4/10/2013)

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Mi 40 sentiment 20130410r

 

Some statistics for the MANIFEST 40, our collection of the 40 most widely-followed stocks by our subscribers:

Average Relative Strength Index (12): 64.3

Price Pressure: +10.5%

Average Value Line Low Total Return Forecast: 9.8%

3-Year Average EPS Growth (2012-2014): 10.0%

Average Fusion Ranking: 85

Morningstar Average Price-to-Fair Value: 97%

Standard & Poor’s Average Price-to-Fair Value: 96%

Notable Stocks

Lowest P/FV (Morningstar):  Apple (AAPL)

Lowest P/FV (S&P):  Cisco Systems (CSCO) and CVS Caremark (CVS)

Look Out Below?: Danaher (DHR) recently broke below RSI of 70 …

So did Fastenal (FAST).

Tracking Dashboard: MANIFEST 40

Fusion Screen (4/9/2013)

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By Deglr6328 (Wikimedia Commons)

Infosys Tech (INFY) remains among the more interesting stocks in our Fusion Screen.

Recent Solomon Select feature Atwood Oceanics (ATW) continues to represent the Energy sector. Apple (AAPL) may have more short-term downside when it comes to price, but is a solid selection for committed long-term investors.

Screening Criteria:

1. Fusion Ranking = 100. (Combination of Fundamental and Technical Factors)
2. Quality Ranking greater than 60.
3. Bullish Point-and-Figure Sentiment. (Source: Stockcharts.com)
4. Price-to-Fair Value less than 100%. (Sources: Morningstar and S&P)

Fusion screen 20130409

Look Out Below: MYL, NVO & RHI

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Lookout Below

During the weekly update, the following stocks were flagged based on a decline from RSI greater than 70 (potentially overbought) to less than 70. Reminder: We use a long-term chart (monthly) for this analysis.

All of these companies should be subjected to an assertive portfolio-centered selling analysis.

  • Mylan Labs (MYL)
  • Novo Nordisk (NVO)
  • Robert Half (RHI)

Lob dash 20130412

Mylan Labs (MYL)

Myl 10yr 20130412

Novo Nordisk (NVO)

Love the company … would probably want to wait for a slightly higher PAR and a clear reversal in the RSI trend.

Nvo 10yr 20130412

Robert Half (RHI)

This community favorite has had a heckuva run over the last several months. With a PAR (5.9%) less than the market average (MIPAR = 7.0%) and relatively rare RSI breaks and excursions over the last ten years, if you’re holding this high-quality (Quality Rank = 88th percentile) career and employment leader, your recent gains may be worth capturing/protecting.

Check overall portfolio return forecasts and this RSI break condition could be a tiebreaker when pondering selling candidates.

Rhi 10yr 20130412