Analysis Updates ~ market folly

Wednesday, June 4, 2008

Analysis Updates

I just wanted to check in on some old stock analysis I had written around mid-April, when I first started this blog. Newer readers who might not have read through my old archived posts might be intrigued with some of the posts I made back then. Initially, I started this blog as a place to outline my thoughts, rationale, and research behind the stocks I was investing in. The very first few posts I made on this blog were brief analyses of various stocks. I looked at some fundamentals, some technical analysis, institutional ownership, and various other aspects that would draw me to a various stock. And, instead of keeping it all stored in my head, I wrote it all down in a compact form. I want to catalog these updates simply because I figured that establishing further credibility doesn't hurt, since the blog is fairly new and I've received a few questions about my track record, my investing style, and my portfolio holdings.

So, let's check in on some of those analyses I wrote a little over a month ago.

Burlington Northern (BNI). I wrote about BNI here in mid April. Obviously, the rails have seen great strength due to their association with the agriculture, coal, and all that good stuff. Not to mention, Buffett and numerous hedge funds have strong positions in BNI and various other rails, so that just sweetened the deal. Since writing about BNI, the stock is up 13.5%, not bad for a little over a month's time. I actually hold BNI in my longer term portfolio, which I don't usually write about here. Because, after all, that portfolio is more "buy and hold" type investments for retirement, and there isn't much exciting portfolio activity to blog about. But, I just wanted to point out my write-up of it for those of you who have been living under a rock and have missed the whole rail boom.

Foster Wheeler (FWLT). I wrote about FWLT here at the end of April. Infrastructure has been one of my favorite plays simply due to their heavy exposure to oil and gas, and their huge international exposure. As the world gets bigger, new infrastructure need to be built and old infrastructure need to be replaced, its as simple as that. Since writing about FWLT, the stock is up 10.6% in a month. I actually currently do not have a position in FWLT, as I had been using the recent strength to sell out of it. I am now waiting for a pullback in this name, as well as in Fluor (FLR). Those are two of my favorite infrastructure plays due to their international exposure, massive backlogs, and strong management teams. Keep an eye on those names for the pullbacks because they will be great longer term holds as the world continues to grow, expand, and consume.

Energy Conversion Devices (ENER). I also wrote about this name at the end of April here, when I really began to sit down and research "green" trades/investments in greater depth. And, holy cow did I find a winner. Since writing about ENER, the stock is up 80.9%, yes that's right, 80.9%. Needless to say, I am no longer in this name and haven't been for a while. I left a bountiful amount of money on the table. I took profits when I was up 40% and sold out completely when I was up 55%, because a) it would be stupid not to take profits and b) the move became parabolic, so I had to exit and preserve the profit I had. But, I'm happy none the less because I stuck to my discipline. I'm looking at this name and its hard to say whether it will ever be a good name to re-enter, simply due to the space that it is in (green trades are volatile as of late) and the parabolic move its had. I'll continue to monitor it though because I do like the company.

Fluor (FLR). This is another of my favorite infrastructure companies that I wrote about here at the end of April. The same logic for FWLT applies to FLR, so I won't repeat myself. Infrastructure is here to stay for the long term and their backlogs truly are astounding. Since posting about FLR, the stock is up 18%. I do not currently own FLR either, as I've used the recent strength to sell out of my position and wait for better prices to re-enter. The whole infrastructure space has had a big run-up as of late and is due for a pullback/correction.

Research in Motion (RIMM). This has been a favorite tech stock of mine for a while now (along with AAPL) for obvious reasons. Blackberry is a ridiculously strong brand and the nickname Crackberry makes perfect sense. I analyzed RIMM as one of the first postings on the blog here. Since then, the stock is up 8.9%. I no longer have a position in this name either, as I've recently sold out due to lack of meaningful catalysts in the near future, not to mention its had a strong run up. This is yet another name that I'll have to probably wait tirelessly to re-enter, but it will be worth the wait. Because, after all, the company boasts a very strong brand and has a dominant position on its market niche (corporate users), despite what critics might say about the iPhone. But, that's another post for another debate another time.

Potash (POT) and Mosaic (MOS). Now, these next 2 names aren't up by some whopping % since I wrote about them, so nothing special there. But, I wanted to highlight them due to the fact that some excellent buying opportunities may be coming up soon. I wrote about POT here and MOS here. These 2 companies continue to be some of my favorite names due to their awesome positioning in a huge secular trend. They have pricing power and have limited supply of a good that is seeing ridiculous demand. I'll let you read my previous posts to get the rest of the picture. But, when commodities eventually get sold off (and they will), these two names will most likely be hit hard and will present excellent buying opportunities or trading opportunities at the very least (for those of you who are more trade inclined). But, I will be loading up on these names on the dips simply because each earnings call they have, they blow out the numbers. And, until these guys show evidence of slowing down in terms of pricing power, its game on.

Alright, those are all the ones I wanted to highlight, so check those pieces out if you haven't already. I've written a bunch more analyses that I haven't touched on in this post, so make sure you look into those too if you're interested. They mainly detail longer term "boring" plays though like Procter and Gamble (PG), Johnson and Johnson (JNJ), and Diageo (DEO), etc. Those were all an aggregation of my research for my longer term retirement portfolio, which, again, I do not typically detail on this blog due to its "buy and hold" boring nature.

Losses: I would be remiss if I didn't include some losses in here to go with all those gains I've just so arrogantly bragged about. Because, after all, nobody's perfect. I didn't write about it much, but I did "twitter" (see widget on the upper right hand corner of the blog) that I had bought some New York Stock Exchange NYSE (NYX) Calls as an investment since I liked the company's positioning and new management. But, it is safe to say that I've taken a bath on those and they have significantly reduced in value. If you haven't noticed, NYX has been bleeding it out lately, down practically every single day for the past 2 weeks. Its a death trap right now. And, while I think it will be a good investment at some point, I was certainly very early (I'm in it for longer term anyhow). I am going to add the second part of my position here when NYX hits $59 (because let's face it, it probably will.... and at this rate, probably tomorrow). So, I scale in and out of my positions. But, its safe to say that the first 1/4 of my position on this name is inflicting massive amounts of pain on my portfolio. Additionally, I had posted that I was getting long the Japanese Yen here in this post based on a technical setup. Well, that trade has not held up technically and I am thinking about exiting it. My stop loss has not triggered, but its not working out as well as I would like. Currently, it is at a 2.5% loss for me, and with the dollar starting to perk up a little bit, I most likely will exit.

One last thing. I wanted to kind of get some feedback from readers as to what they would like to see on the blog. My intention is to post a mix of market commentary, portfolio updates, and stock analysis write-ups like I've linked to in this post. Are people wanting to see more of my individual stock analysis or less? After all, they are kind of lengthy. I typically would do something like this for all the major stocks I'm invested in (or considering investing in) due to my macro investment theses. Hit up the comments section and let me know your thoughts. Thanks!


AngleEdge said...

Hey MarketFolly,

Enjoy the blog and originally discovered it from Fund My Mutual Fund's blog. Pretty similar style and I enjoy both of them so keep up the good work. I have been comparing your and Mark's ideas, and, while similar, it is always good to have that second source to read and see if anything else is uncovered. I like the current style of your blog and can't really think of much to suggest to change it.

Take care,


marketfolly said...

hey brian thanks for the kind words. Yea I originally found mark's site due to my macro investing style. We're similar, but we definitely have some differences as well. So its good to be able to have a second source in someone of the same like-mindedness as you said.