For your consideration...STMP, IBP, AHS

I’ve been adding some new stocks to the community spreadsheet recently. I started doing this either after discovering something in a write up or seeing something in an observed trend. For example, I added a basket of stocks from the discount retailer segment after seeing their impressive rally last week. None really made the cut BTW.

But some of the stocks I added appear somewhat promising, at least according to their 1YPEG. Here are three I’ve found that may warrant additional research:

Stamps.com (STMP) - TTM P/E 17, YoY EPS Growth: 100%, YoY Rev Growth: 59%, 1YPEG: .17

I see Stamps.com as sort of the corollary to SHOP, but much more extensive since their services cater to a much larger base of customers. Stamps.com makes it easier for small businesses to ship their products to consumers. They negotiate volume rate discounts with USPS on your behalf and pass these savings onto you (with them taking their cut of course). They provide the equipment for you to weigh your packages and print your own labels at home. The labels are encoded so the end customer doesn’t see the actual cost to ship - it was at a discount after all, less than the official price USPS will tell you. Stamps.com has been doing a boom business recently.

Installed Building Products (IBP)- TTM P/E 33, YoY EPS Growth: 84%, YoY Rev Growth: 34%, 1YPEG: .39

IBP is an insulation installer. They are the second largest insulation installer serving the residential new construction market in the United States. I see this as a corollary to LGIH, but again, they cater to a much larger base of customers. If you think new construction is going to go up this year, you know these houses all must come with insulation.

A M N Healthcare Svcs (AHS) - TTM P/E 19, YoY EPS Growth: 150%, YoY Rev Growth: 43%, 1YPEG: .12

AHS is a placement agency - for physicians and nurses. Their goal is to become a one-stop shop for hospitals, providing recruiting, hiring, training and other services. Among healthcare workers the numbers retiring over the next few years will roughly equal the number coming in. However, this is a problem. ObamaCare has added 20 million people since it was enacted in 2010. This expands the number of people seeking treatment. Combined with rising demand AMN will have its hands full - for the next several years - as doctor shortages are expected to be high.

I think these three are interesting plays on three different industry trends: Housing, E-Commerce and Healthcare. I think they are interesting because they are like an investment in the “trend” moreso than in a specific company in the segment - much like an investment in AMT is an investment in the proliferation of mobile devices and you can invest in the trend without having to be right in the mobile device winner.

I submit these as thoughts for further research. I have not taken a position in any of these companies, yet. If anyone has experiences with these companies and would care to share your thoughts - please do.

Happy Memorial Day everyone and thanks for reading.

Best,
–Kevin

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Kevin,

I bought STMP recently as it looks incredibly inexpensive given the phenomenal growth. I saw the short articles on Seeking Alpha and imagine that’s probably a good part of why the stock is down. Limited information out there, so I’m being cautious, but I have a 2.5% position or so. I’d love to know anything else you’ve found.

The others are interesting as well, esp AHS. Please share anything you dig up, should you choose to research further.

For what it’s worth, my first blush gut reaction is that IBP doesn’t strike me as a screaming buy. I don’t particularly like the thin and non-expanding margins.

Thanks,
Bear

Interesting one Kevin - thanks for sharing.

I know of Stamp.com (although I have to say I had assumed they had wasted away in the dotcom crash), I hadn’t come across IBP though they look attractive.

AHS is the one I have been tracking. With an ageing population it has great potential assuming it can side step any tug of war over Obamacare policies. Unfortunately it seems to have gone up 6x since I have had them on my watchlist in just a few years - now there’s one that got away!
A

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Kevin,

Thanks for bringing these companies to this board. I’ve been studying AHS today: 10Q, press releases, investor presentation, conference call, Wikipedia. I don’t have a presentable write up yet. This is a combination of acquisition and organic growth stories. Revenue and earnings were bouncing around the flat line from 2nd half of 2012 through first half of 2014 and since have taken off.
I don’t feel that I have a good handle on exactly what the managed services programs are, but it seems that those services are providing requests for all the recruiting services. They have SaaS business that help manage and forecast recruitment needs.
I did buy a starter position June 1 to motivate the study of the company. Hope to post more later.

Thanks again,

KC

FYI guys - I took a nibble at AHS last week, it seemed to have fallen enough to consider a 1/3rd buy in.
Ant

it seemed to have fallen enough to consider a 1/3rd buy in.

I guess that the question is: “Why was it falling, and is it a valid reason?”

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Ditto the 1/3 buy in on AHS, but two weeks ago. So, I’m just back to even on today’s rise.

KC

I guess that the question is: “Why was it falling, and is it a valid reason?”

The price started serious decline around 8/3 at release of Q2. They made 0.61 versus 0.38 year earlier, a beat of .08. Next quarter estimate is 0.55 vs. 0.48 year earlier. P/e is now 14.8.

I think the price drop is macro and not related to company performance. Campaign talk about health care? They don’t deal directly with patients so cost cutting in health care would be secondary to them, less money for their customers to spend.

KC

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