With Japan down 7% on Thursday, will we hunt or taper today?
With Japan down 7% on Thursday, will we hunt or taper today?
Companies of Interest
Screening Criteria: (1) Included in the update universe for this week’s release by Value Line, (2) Return forecast at least 5% (percentage points) greater than the average return forecast and (3) MANIFEST quality rank (percentile) at least 60, i.e. all “Excellent” and “Good” companies in top two quintiles eligible.
Materially Stronger: Amerisource (ABC), Bruker (BRKR), Meridian Bioscience (VIVO), Navistar (NAV), Illumina (ILMN), Analogic (ALOG), Medical Action Industries (MDCI)
Materially Weaker: Cutera (CUTR)
The Value Line low total return forecast is 6.5%, down from 6.7% last week.
The Growing Chasm
I think the problem/challenge/opportunity is at least one quantum order larger than the national debt we face. (Yes, you read that right … and I’m serious.)
The following five minute video illustrates the deep distribution imbalance of wealth in as powerful a delivery as I’ve seen in some time.
Wealth re-distribution by confiscation is a flawed mechanism, particularly when it is fueled by envy and dipped in a Robin Hood aura.
Looking at the accompanying graphic and fully absorbing the video, we’re getting further and further from a long-term program of education and equity participation in this country, a campaign that would hold/deliver many long-term solutions to clear and present challenges and opportunity for a better future.
Sadly, over the last several years, the chasm has widened. If we’re going to turn the tide, a prolonged educational effort is essential.
Companies of Interest
Materially Stronger: Cognizant Technology (CTSH), Legg Mason (LM), ACI Worldwide (ACIW), AON (AON), Amazon (AMZN), Mastercard (MA), Yahoo! (YHOO), Bank of America (BAC), AOL (AOL), LinkedIn (LNKD)
Materially Weaker: Baidu (BIDU), Bank of Hawaii (BOH), RealNetworks (RNWK)
The Value Line low total return forecast is 6.7%, unchanged from last week.
Mindray Medical (MR) is a developer, manufacturer and marketer of medical devices. From its main engineering and manufacturing base in China, and through a global distribution network, Mindray supplies a broad range of products across three segments:
Nothing wrong with these fundamentals … trends in place, growth at 15%, net margin forecast at 18% and a reasonable projected average P/E in the 20x range.
The recent price gains have “consumed” some of the return forecast — but the PAR is still at relatively high levels, particularly when considering the median return forecast (MIPAR) is near 6%.
Although Mindray is pushing towards long-term resistance and an overbought RSI, there’s a chance that the persistent fundamentals (see business model analysis) will finally “take out” the resistance level. Momentum (ROC) has been strong so we disregard the RSI levels.
About The Conference
Since 1996, the world-renowned Sohn Investment Conference has been the premier investment forum, bringing together the world’s savviest investors to share fresh insights and strategies in support of pediatric cancer research and treatment.
Wall Street’s best and brightest investors participate in this unique, “must attend” event to share their expertise with an audience of more than 3,000 people, comprised of portfolio managers, asset allocators and private investors. Most speakers manage large proprietary investment portfolios that have outperformed the market for many years and do not share their insights in any public forum, but they volunteer their time to the Conference for the benefit of the Foundation. All contributions support the Foundation’s mission to support pediatric research and care.
Notes From The Ira Sohn Conference 2013 (via Joshua Brown)
WSJ’s Live Blog (Wall Street Journal)
I wasn’t invited to share any investment ideas, at least not until next year — so here’s my 2013 Sohn Shopping List — we’ll take a look at some of these.
These screening results are based on:
Here’s the roll call of selections based on $100 invested in each idea at the close on 5/7/2013 (immediately preceding the conference). Note that a number of selections are not covered (at least not yet) by MANIFEST and that the entries in red are short sale suggestions by Messrs. Chanos, Gundlach and Jacobson. It’s not unusual to see an event or listing of stocks like these hedge fund selections to include a number of Jeremy Grantham’s flaky stocks.
And Ackman’s selection of Procter & Gamble (PG)? C’mon, man. Ack. We can only assume he’s too preoccupied with his Icahn jousts to avoid phoning it in. Nothing against PG, great company, but at a return forecast in low single digits?
Mindray Medical (MR) is our entry with honorable mention to Fossil (FOSL) and Synchronoss Tech (SNCR).
The Learning Never Stops
One of your all-time favorite cover stories dealt with the combination of well-placed skepticism and the conscious decision to “leave the couch” as a long-term investor. In a nutshell, we asked, “Can investing really be this simple?” The answer is wrapped in over seven decades of experience and deployed regularly with measured courage. At the same time, we recognize that the learning quest is a never-ending road. We believe in Occam’s Razor. You could say that our cornerstone is trend reversion centered on imagination and long-term time horizons. This month we visit some letters, questions and commentary … celebrating your curiosity and achievements. Can old dogs learn new tricks? What about young dogs?
We share the following blog post and some subscriber correspondence. Names are withheld, but you know who you are out there … and some have been paraphrased to combine multiple letters and comments into digest form.
As a kid, they were among the moments I dreaded most. The “choosing of sides” on the playground or the sandlot were gut-wrenching moments because I often didn’t merit selection as a draft choice. “What about him?” “Oh yeah … he can be on your team if you want.”
Things are not always what they seem.
I had pretty good hands and was pretty good at catching a football. When it came to basketball, there were times when I heard, “Wow, the ‘fat kid’ can really shoot.” Funny, but if I close my eyes and listen, I can still hear those words.
Fast forward a few decades. We were on a mission trip in West Virginia taking up residence in a Scout camp in the mountains. We decided to play a pickup game of basketball. My friend Don and I smiled at each other as the muscle-bound high school seniors and college freshman in the group loaded up their rosters with their colleagues. We were left standing on the sidelines. Make no mistake. It’s still pretty gut-wrenching to endure this rite of passage as an “old man” but we suspected that we had the unknowing youngsters in our crosshairs. Don and I ended up on the same team. Amusement transformed into amazement as the “old men” taught the punks a thing or two. I think Don made about ten closely guarded shots in a row. Me too.
Our message is simple. Whether you’re talking about old books or old dogs, be careful about the judgments you make based on the cover. In some cases, maturity is just what you need and it can prevail over youthful exuberance.
A quick look at some stock selection vehicles, including newsletters, model and tracking portfolios.
Kudos to the Better Investing Stock to Study selection team for the performance delivered since July-2010. Over that same time frame, our Round Table and the Investor Advisory Service have been a little mired, but we consider that a temporary condition all around.
The returns for the MANIFEST 40 collection of our most widely-followed stocks continues to be strong … and we do seem to study and shop in the same tributaries.
Companies of Interest
Energy companies like Schlumberger (SLB) and National Oilwell Varco (NOV) continue to offer attractive returns. No major shifts among the industries to report this week.
Materially Stronger: Host Hotels (HST), Rowan (RDC), Dril-Quip (DRQ), Cytec (CYT), Wyndham Worldwide (WYN), Vail Resorts (MTN), Sinclair Broadcast (SBGI), Lamar Advertising (LAMR)
Materially Weaker: International Game Technology (IGT), McClatchy (MNI), Monster Worldwide (MWW), American Greetings (AM)
The Value Line low total return (VLLTR) forecast is 6.7% versus 6.8% last week.
Nothing to see here, go shop for some stocks, high-quality (solid financial strength)is still a pretty good idea with the median return forecast at 6.5%.
This year — thanks to a somewhat lazy lay up procedure a few months ago, I figured Dad’s streak was in total jeopardy. But the mower started on the first pull for the ninth year in a row.
Lessons From Fathers & Simple Things, Solid Results
Originally published — April 9, 2012
On this day of days, when the stock market is doing its latest rendition of “you’re the grass and I’ll be the lawn mower.” The Great Humiliator is not happy about the latest jobs report coming in far under expectations on Good Friday and that combines with Chinese concerns, Euro sluggishness and Spanish indigestion to form a quagmire.
Years of investing and watching the masters has taught me to listen … listen well … and reach for patience and discipline. Sometimes it’s the little things and little reminders that make all the difference in the world.
The balmy March-April that we’ve enjoyed in southeastern Michigan means that the yard is well on its way to jungle status. This weekend it was time. Time to retrieve the mower from careful storage and slumber. A trip to the gas station and it was time to yank that cord for the first time this year. I have seven straight years of starting on the first pull. I wondered if merely wondering about eight-in-a-row would provide enough jinx for a sputter, stutter and stall this year?
It wasn’t always this way.
Years ago, I faced inevitable replacement of spark plugs and various other tinkering to restore a stubborn non-starter to working condition. This would often include a trip to Dr. Mower and a pricey restoration.
Then one day my Dad asked me if I ran the mower dry on its last usage in late October or early November every year. Really, Dad? That’ll make a difference?
It makes a difference.
Eight for eight. Thanks, Dad!
With the stock market in full lawn mower mode, we’ll simply remind that the median forecast is not near historical lows and unless earnings falter, the current palpitations will probably pass. Patience. Discipline. Seek high-quality and mow anything non-core that needs trimming. Do the little things that you know work and leave the pricey restorations to the panic-stricken herds.