If you have a favorite stock that you think fits in with the spirit of the board, and you would like to tell us about it, please do. I’m looking primarily for MF recommended stocks that have slipped by me, but if others qualify, fire away. The reason I’m asking is that I feel I’m getting too concentrated (down to about 18 positions (not counting my mini-positions)), and would like to find one or two interesting stocks to add.
Thanks,
Saul
Another stock my son put me onto about a year ago is ACHC - Acadia Healthcare. They have been growing, often by acquisition, and are up about 30% from when I bought.
I don’t know much about them though.
Z-Bar
Hi Saul-
First-time poster on your board here, so, let me just start with a quick thanks for all your efforts. I’ve taken positions in PFIE and UBQT after learning about them here.
Since you asked, I’ll return the favor with two possibilities that sort of seem like “Saul” stocks to me. Full disclosure: I don’t (yet) have a position in either stock, as I’ve only learned about them from impressive-sounding Seeking Alpha articles and haven’t really done enough of my own research to convince me to jump in.
First off is IMMR, Immersion Corp. (articles: http://seekingalpha.com/article/2294915-a-tech-stock-so-prom… and http://seekingalpha.com/article/2314145-update-immersion-and…) IMMR makes sensors that let tech gadgets offer the simulation of tactile sensation (“haptics” is apparently the name of this Next Big Thing of the Week)- basically, with IMMR sensors, you feel what’s on your screen. According to that first Seeking Alpha article, they’ve got tons of patents, and the products have applications in gaming (of course), wearables, mobile devices, automotive systems, and medical devices. The second article notes that they’ve inked a deal with Huawei to get their products into the Chinese mobile device market. The stock’s been on a bit of a tear as a result, but the price still seems pretty reasonable (PE in the very low double digits). Also, EPS is supposed to grow a lot and they have no debt with $81 million in cash in the bank.
The other suggestion to look into is a tech company in the less-than-$5/share group, INPH, Interphase Corp. (article: http://seekingalpha.com/article/2316145-recent-disruptive-pr…) They offer both electronics design and manufacturing services. They’ve also got an interesting new product out, and I expect investments in INPH over the next few years will live or die by its success. The product is Penveu, which basically can turn any surface into an interactive whiteboard. It would be used in classrooms and business conference rooms and offers much greater mobility for the teacher/presenter than an actual interactive whiteboard at a MUCH lower cost, and without the need for calibration. A couple of videos at http://www.penveu.com/products.html?video give a better idea of what this product does. After numerous delays that really beat the stock price down, Penveu just began shipping at the end of May. As noted in the SA article, INPH has just paid off its remaining debt and moved into a factory with triple their former manufacturing capacity in anticipation of Penveu demand. I can certainly envision Penveu becoming a huge thing, but I’ve also certainly thought that about other past promising technologies that didn’t pan out in the end.
Anyway, I haven’t been through financial statements yet for either IMMR or INPH, so at whatever point I do it’s certainly possible there would be things not to like. And, to reiterate, I have no position in either company at this point. They do look interesting, though.
If you have a favorite stock that you think fits in with the spirit of the board, and you would like to tell us about it, please do. I’m looking primarily for MF recommended stocks that have slipped by me, but if others qualify, fire away.
Denny that sometimes posts here has discussed KNDI which has done very well and looks to be very in the early stages. I have a bit of an interest in BYD as they have more than 50% of their rev tied to electrical vehicles in China but only started to explore. I am much more comfortable with KNDI at this point as I already hold them.
Check the public KNDI board for better discussions on them
Bidu
Gild
Thanks to everyone who suggested stocks so far.
Z-Bar, I’ll look into ACHC. Thanks.
awiseowl, I’ll look into IMMR and INPH too. Thanks to you too.
jde, I’m sorry. I know KNDI has a great story and seems to be doing very well, but I won’t invest in ANY Chinese stock. After being burned so many times I’m acutely aware that the Chinese entrepreneurial class doesn’t seem to have the same culture of shareholder’s rights that we have, and seems to consider the company a personal possession of the principals, with outside shareholders as just a money source.
rizzz, The same for BIDU, I’m afraid. On the other hand, I have looked at GILD. I don’t know what to make of it. With one great medicine that they are selling at exorbitant prices, it may do absolutely great, but it’s not my thing. Sorry, but if you have other ideas, I’m open.
Saul
Saul,
We’ve discussed INVN before. You sold out earlier this year. If I recall correctly you didn’t like the lack of strong earnings growth.
I own about a 5% position in MELI. Issues with the Venezuela and Argentina currencies have the stock down despite huge gains in local currency revenue so the business is developing very nicely if you look past the currency problems. If I remember correctly, the company is growing sales 50% y/y. They have been buying real estate in Venezuela and buying dollar based assets in Argentina to protect against currency devaluation in those countries. They will take a big write down this quarter (due to currency devaluation) but after this bath their results should look better. The stock had a high in the $140s and is now below $90; the stock has a history of big swings but each time has recovered to make new highs. It’s a Rule Breaker stock so there’s a lot of info on the board.
I own about a 4% position in TTS and I’m down about 50% on it. The company is investing in building new stores which turn cashflow positive very quickly. This investment in growth (new stores) keeps the store sales comps down and it also makes earnings look weaker than they really are. Management’s ethics is questionable but the growth prospects have kept me in the stock. This one is both a Rile Breaker and a Hidden Gem.
Chris
We’ve discussed INVN before. You sold out earlier this year. If I recall correctly you didn’t like the lack of strong earnings growth.
Chris, What’s your take on the issue of lack of growth for INVN? Why have you stayed with it?
I was also in TTS after the rec and got out right away (I don’t remember now why). Your misprint of a “Rile Breaker” makes me wonder what you really think about it.
I’ll look into MELI. Thanks.
Saul
What about HAIN? Growing fast, in a hot sector (“healthy” food). A tad bit high on their PE and it has some debt. Also a serial acquirer.
If you have a favorite stock that you think fits in with the spirit of the board, and you would like to tell us about it, please do. I’m looking primarily for MF recommended stocks that have slipped by me
I am thinking OLED. Turned profitable in the last year or so. Growing revenues at a fast rate. They have annual lump sum payments from Samsung in the 2nd quarter (next to report) and 4th quarter.
-For the first quarter of 2014, the Company reported net income of $4.0 million, $0.09 per diluted share, on revenues of $37.8 million. For the first quarter of 2013, the Company reported a net loss of $4.8 million, or $(0.10) per diluted share on revenues of $15.0 million.
-For the full year 2013, the Company reported revenues of $146.6 million, up 76% compared to revenues
of $83.2 million for 2012. Operating income rose to $38.2 million for the year, up 180% from
$13.7
million in 2012. The Company reported net income of $74.1 million, or $1.59 per diluted share, for the
full year 2013, compared to net income of $9.7 million, or $0.21 per diluted share, for 2012.
http://ir.udcoled.com/results.cfm
They seem on the verge of tremendous spurt in growth. Samsung building out capacity for mid sized displays, LG making good progress on TV’s panels, a couple of manufacturers building out manufacturing capacity for lighting and flexible displays are on the move. All of these use OLED’s IP in AMOLED tech. Better looking, thinner, more energy efficient displays. Can be flexible and transparent too.
With all that seemingly imminent why is their share price dirt cheap? Concerns about IP protection, some patents are up in 2017 I believe. They are also constantly improving on those patents. There have been Seeking Alpha based short attacks over the last few years around this issue.
Another reason is possible loss of host material sales. My understanding of it is in an OLED display stack you have OLED emitters, OLED’s key IP, and you also have host materials which have no IP protection. OLED has been selling a lot of host materials but may be losing some of the share of that market.
Another reason for the cheap share price is because Samsung recently backed away from developing TV displays. Samsung’s tech was not getting anywhere near the yields LG is getting in manufacturing TV’s. Not noticed, apparently, is that Samsung and LG have a cross-licensing agreement so while LG is perfecting their manufacturing process for TV displays Samsung is putting its money into mid-size displays. Samsung can then lease the manufacturing process from LG. At least that is my understanding of it. I believe those are the things to look out for.
OLED is one of my largest positions. There are excellent posters on the RB OLED board and good coverage of CC notes and various conference notes by edyboom. Probably some people here could correct me if I am off base on anything I have stated. Thanks for reading.
FB and GILD out w/ massive top and bottom line beats tonite
Both at ath!
What’s your take on the issue of lack of growth for INVN? Why have you stayed with it?
First, my position in INVN is 4.0%. A few months ago it was double that and I cut it in half due to slowing growth. My remaining shares have a very low cost basis (under $12/share) and I am reluctant to realize any more long term capital gains in 2014.
Back to growth: INVN is still growing sales but it has slowed. Sales grew 174%, 21%, 58%, and 36%, respectively, from 2009 through 2013. In 2014, sales growth slowed to 21% over 2013. If you look at each quarter to the prior years quarter, sales growth has been positive going back at least 2 years (I didn’t look at quarterly sales numbers prior to Q1 2012).
Earnings growth, on the other hand, hasn’t been there on a consistent basis. This is why I cut my position in half a few months ago by selling my highest cost basis shares.
I am giving INVN a chance to do some great things. They acquired 2 companies over the past year and then 2 more this month. I believe that they have a great vision of where sensors are going and they are making the right strategic moves (IMO) to capitalize on the proliferation of sensors with low power and more and more capabilities. I believe that adding additional senses will have a logarithmic increase as the senses will be able to work in conjunction with each other to add applications. The acquisitions they made are designed to integrate more senses into one chip. They settled the lawsuit with STM for which they took a one-time $15M hit but will reduce their annual expenses by a similar amount each year going forward (STM-INVN lawsuit was a costly, ongoing expense). It is quite possible that they will get into AAPL products this year.
Yes, even if they are successful in implementing their strategy, the earnings will need to grow in order for the stock to appreciate (in the long run). Price per sensor is going to keep declining so they will need to sell more and reduce cost per sensor to grow revenue and earnings. However, I think the growth in the number of sensors is going to be massive.
I realize that there are a lot of ifs so I understand why you got out. And that’s also why my position size is 4% and not 8%.
Chris
FB and GILD out w/ massive top and bottom line beats tonite
GILD’s Solvaldi sales were $5.8B for the first 6 months of 2014. In 2013, AbbVie’s Humira was the top selling drug with $10.66B in sales. With sales still accelerating, Solvaldi is on track to beat that and could well be the best selling drug in 2014.
The high price of Solvaldi is not keeping down sales. The company claims the cost of the drug is similar to alternative treatments. Solvaldi has a shorter treatment cycle (12 weeks or 24 weeks for patients co-infected with HIV) without the terrible side effects that come with other treatments. It cures HCV (certain types) in more than 90% of patients so once the treatment is done the drug is no longer needed (unlike many other drugs where treatment continues for years).
GILD’s other main business includes their HIV drugs sales of which are not growing fast.
I sold my 3% position in GILD in the low $80s reacently.
Hello all,
Here’s a snippet from FB results this Q:
Facebook topped analysts' estimates and delivered quarterly revenue of $2.91 billion, up an impressive 61% year over year. What is stunning, though, is the bottom line, which grew a whopping 138% year over year, to $791 million.
What kind of premium is that growth worth?
I also think AAPL, my largest position, is getting ready to lift off. It’s PE is less than the S&P and it has a new product pipeline that 2 of their most senior executives have said: “…the most impressive product lineup I have seen in 25 years”, and then Tim Cook, “I’m very excited about the new products we are about to launch.”
I own several hundreds of shares with a low basis, having been buying it on and off for 4 years and not having sold any. So I’m already way up but even with that and with a position size of about 8%, due to what is going on right now, I’m considering more options on it. I expect somewhere in the 1st quarter of 2015 the stock will be over $115. That’s 33% growth for an expected 9 month period (not annualized) and leaving me with a breakeven price 11% below the current price.
I think AAPL is in a point of their history that we won’t see in the future, like Walmart in the 80’s. They are coming out of a price funk that no one can explain rationally, heading into a superb pipeline of new products that create an ecosystem which serves to make the customers very sticky and almost guarantees reccurring revenue via upgrades… I’m expecting health MEMs to be announced from now until the far future, with each one appealing to a different demographic, the first being the biggest one, the baby boomers.
And they pay a dividend and are buying back shares.
In a word, AAPL is where all the other companies are striving to be.
Mykie
Saul,
I like Under Armor (UA). I have steadily added to my position for the past 5 years and still believe this has more room to grow. They are adding new product categories and new markets all the time. Nike is the king of the block, but for a lot of folks, especially the younger ones, this is new and fresh! Everyone wants to wear the newest trend and UA seems to be it. The only sports brand my kids ask for now is now is UA, and that all I see around with their friends and teammates. You should have a look; also, I have a large position now.
I like Under Armor (UA). …for a lot of folks, especially the younger ones, this is new and fresh! Everyone wants to wear the newest trend and UA seems to be it.
LegoAbs,
But I’m an old guy, totally out of touch with the very young. I know that no company selling to the young stays in fashion long-term. Brands can quickly fall out of favor when it comes to fashion. But how would I know, before it was too late. Just asking.
Saul
I like Under Armor (UA). …for a lot of folks, especially the younger ones, this is new and fresh! Everyone wants to wear the newest trend and UA seems to be it.
I have a 2.6% position in UA. It’s at the top of my list for selling because of the super high valuation. Actually, right when you posted I was going through the financial statements trying to figure out how to convert their report EPS into adjusted EPS…
GauchoChris,
UA has a high valuation but seems to be staying that way all the time. I sold partial position on several occasions because of valuation concerns but the company keeps growing – eventually catching up. This is a Peter Lynch stock – look around and see the trend. I agree with your valuation concern that is why I sold several $70 calls after this latest run up. However, as in most cases, I end up adding UA again higher.
LegoAbs
UA has a high valuation but seems to be staying that way all the time. I sold partial position on several occasions because of valuation concerns but the company keeps growing – eventually catching up. This is a Peter Lynch stock – look around and see the trend. I agree with your valuation concern that is why I sold several $70 calls after this latest run up. However, as in most cases, I end up adding UA again higher.
Maybe. But my thought is that if I sell UA and buy another stock will I make more money. High valuation stocks will either grow into their valuations or drop sharply if they have a bad result. Stocks like SYNA are growing even faster and have P/Es which are more than 60% lower.
Not to change topics, but speaking of SYNA, anyone know why the stock is getting rocked again today?