Monday, March 14, 2005


Well, finally the markets had a decent day. Two big movers today were Genentech (DNA: +24.77%) and Hansen Natural (HANS: +26.14%).

On to my positions.
Ship Finance International (SFL): These shares are due to spin-offs from Frontline (FRO). Basically FRO's tankers went to SFL, who then lease it back to FRO and they share in some of the tanker profits. FRO still controls some SFL and they plan to spin this off to investors probably within the next half year. I have a relatively small position (20 shares), but I might add on some price drops. SFL is less volatile than FRO, and they should have a consistent dividend policy.

Nam Tai Electronics (NTE): I was looking at this one around the 18-19 level, but I was worried that a good chunk of their sales came from LCD screens, where prices have been dropping. Then last quarter's numbers came out and they were great, and they initiated a pretty high dividend policy. They had good sales growth in their other segments and even though it ran up a few dollars, I still thought it could run a little more. I ended up buying 100 shares at $23.82
Today it ended at $27.66, so it's had a good run since I've bought it (less than a month ago).
My original target was $30, but I might be moving this up to the $35 range. I'm also thinking about using a covered call strategy, which I'll hopefully detail in a future post.

My next three positions are recent buys and I took a different outlook than my previous investments. One thing I have been trying to do (on paper) is look for stocks on a rebound, buy them, and sell them after a few dollars. I've been tracking these at work and had an average gain of around 18%, so I'm hoping this continues.

Mueller Industries MLI: I'm losing about 2% on this position and it had, I think, four down days. Today it finally ended up one penny (!). I'm tempted to sell because after looking further into their financials I think I can find a better buy. Honestly, I'm hoping for a slight rebound in the market so I can re-evaluate this position.

Ennis Inc (EBF): This is definitely not a long term holding, so if this doesn't rebound soon then I'll sell. I'm in this position and MLI because I haven't found any potential long term buys lately. Ennis does a lot of office supplies and business forms/documents. It has been downtrending from 22, and it looks like it has finally settled down. It also has a 3.62% yield, so hopefully an uptrend will start. I'm about break-even on this position.

LaBarge (LB): This is one of my more riskier positions, because of the low volume. I bought 150 shares with a price target at $13. My cost basis was under $11, around $10.93
It closed today at $11.80 so I'm up around 7.96% in four days. They just announced a decent sized contract today, so that pushed it up. I'm hoping for a little upward momentum in the next few weeks.

Overall I'm not too comfortable with my positions. I do want to get out of MLI, but I will wait a few days. Basically I'm happy with NTE, cautious on LB, I want to add SFL, I want MLI and EBF to uptrend in the near future.

Stocks I'm looking at: I haven't done any screens in a few days and I missed out on some last week. I might look into NCC since it's trading at a discount against its peers and historically, but I'm not too sure.

Besides EBF and MLI (where I'm going for a momentum play) here are some of the guidelines I use when looking for stocks.
Return on equity greater than 10%, net margins greater than 10%, cash on hand, positive cash flow from operations (and hopefully trending upwards), positive sales growth, and I do limit the price to under $35 just based on the fact that I like to take minimum positions of at least 75 shares. If the stock is greater than 35, it will make up a good portion of my total net worth.
75 shares is my minimum so I limit the percentage I pay in commission costs. I use Scottrade so my costs are $7 each way and I do want the overall commission percentage to be under 1%.

Next up: some general financial comments, comments on some blogs, and a few new updates in my financial numbers.
Until tomorrow....