Wednesday, July 22, 2009
Compliance
Unfortunately I can not post about specific companies anymore, for those who are in the securities industry, you understand this word... Compliance. From this point on, all I can speak of is the market in general. Basically they said I have to be vague and indirectional... which kind of negates the purpose. But lets try this out for a while and see if I can walk the line and add value to my readers.
Tuesday, July 14, 2009
The Play Book!!!
Below is my list of companies that I have been moving on aggressively lately. A writing of each company will be posted over the next week, as I have time to write each and everyone of them.
Each one is defined with their ticker symbol, company name, industry, and their closing price as of Monday July 13, 2009.
ABT Abbott Labs Pharmaceutical $46.15
S Sprint Communications $4.30
XL XL Capital Insurance $11.93
UNP Union Pacific Corp Transportation $51.25
GILD Gilead Science Bio-tech $45.26
RIG Transocean Energy $69.70
SVVS Savvis Inc. Tech $10.57
LMT Lockheed Martin Defense $80.00
CAT Caterpillar Cons Equipment $31.80
POT Potash agricultural $84.73
Each one is defined with their ticker symbol, company name, industry, and their closing price as of Monday July 13, 2009.
ABT Abbott Labs Pharmaceutical $46.15
S Sprint Communications $4.30
XL XL Capital Insurance $11.93
UNP Union Pacific Corp Transportation $51.25
GILD Gilead Science Bio-tech $45.26
RIG Transocean Energy $69.70
SVVS Savvis Inc. Tech $10.57
LMT Lockheed Martin Defense $80.00
CAT Caterpillar Cons Equipment $31.80
POT Potash agricultural $84.73
Sunday, July 12, 2009
1st Recommendation
On the average day, and I do stress average there, I spend about 8 hours researching stocks, speaking to investor relations people, reading news headlines, and watching the omniscient CNBC. Through out the day I generally find about 5 companies that catch my interest, from there I will spend about 30mins on each company, to decide whether I want to know more about them and if based on their current stock price if there is any potential gains to made. When looking for a stock or company to invest in, the first thing I do is to find what sector I'm looking to invest in. One sector that I find very attractive right now, is the defense.
A few key interesting facts on the defense sector that I found appealing:
1. The defense sectors outperformed the S&P 500 almost every year for the past 10 years in a row.
2. Defense stocks have some of the lowest PE ratios of the quality stocks out there.
3. Even in recessions defense spending doesn't stop, in fact more often then not it increases.
4. With countries around the world becoming more and more developed, so do their militaries. It is less expensive for them and enables them to acquire better equipment and training by working with foreign defense contractors. This means defense companies have a viable market even outside of the "primary" customer base.
5. The F35 is the first stealth capable fighter jet that is able to be exported out of the United States.
6. On almost every defense company website I went to, and you should check this out too it will make scratch your head, as I clicked on press releases on their site I saw that almost on a weekly basis that they are chosen, selected, or won one grant for projects worth millions and in some cases billions of dollars.
7. Defense contracts are generally for many years, sometimes multiple decades that incorporate supply, support, updates and upgrades. 1 contract with 1 country can be worth $100 billion or more over the life of the agreement. Talk about repeat business.
The defense sector as a whole has taken some losses much has the overall market itself, but where we have seen companies lose 40, 50, and 90% of their value due to losses and an surmounting debt, this is not the case with companies in the defense sector. Often what I found from examining their balance sheets and company reports, that these companies were posting record profits and backlogs that other corporations would dream, maim, and kill to have.
I could go on and on, but the main point that I'm getting at here is that this is a place here that we the investors can make some money. So now the we found a sector, now let's pick a company. I'll save you the painstaking and boring process of breaking down each and every company and deciding which of the bunch is priced at a level where money can be made in the relatively near-term; and just tell you which one to me shines the most. But before I do, I have to say it was quite interesting and I learned, about a lot of things. Some that weren't pleasant also. But overall it was fun researching defense companies, I serve in the army myself, and they have some really cool toys coming out soon. But anyways, back to the subject, if I could only choose one to invest in and maybe even work with (a key thing to value investing), would be Lockheed Martin.
The company needs little introduction, it is one of the largest private defense contractors in the world and with its roots spanning all the way back to the first days of flight in the year 1909. Lockheed Martin is best known for their contributions to the military aviation world, however this company over the past two and half decades has grown far beyond their grassroots. Today's Lockheed Martin derives revenue from multiple lines of business, from aeronautics to space systems. They do over $40 billion a year in revenues and have backlogs that are larger then the annual revenues of some S&P 500 companies.
One thing worth mentioning, if you were to have bought Lockheed Martin stock on January 1 of 2000 when Lockheed Martin stock was around $21, you would have enjoyed an average return that exceeded 18%. Per Year, compound! And that's excluding dividends. Now had you did the same investment amount and invested in any of the funds that track or mimic the movement of any of the major indices, you would be down. You would be down a lot. Oh but the tech bubble really hit in 2000 and 2001 didn't it? Ok, I'll give you that, but it was pretty all settled by January 1, 2003 though right? In 2003 the DOW saw approximately a 25% gain, now that's a bounce back. Either way, you would still be down today. That is why I am a firm believer in active portfolio management. And believe me, or just look at someone's 401K, active portfolio management does not mean you will get true active management from buying mutual funds.
One of the key reasons that I chose Lockheed Martin was their diverse product lines. Besides jets, fighter planes, and helicopters, Lockheed Martin makes parts for spaceships, satellites, guidance systems (key component for all things military), and a lot of other things that go boom too; but did you know that Lockheed Martin is heading up the research for what may be the energy solution we've been looking for? I'll touch on this very briefly, but I encourage you to look it up yourself, it's quite fascinating. The energy system is called O.T.E.C. "O-Tek" as it is pronounced, is a revolutionary system that takes the energy stored in the ocean by the sun and converts it into energy that can be used to power our cities. Watch the video at the bottom of the post before you leave the blog!
Pretty interesting huh? That's one thing that lead to my choice of defense companies to be Lockheed Martin. They're not putting all their eggs in one basket and betting that we will continue to fight each other till the world ends. Even though that may happen, but what if it doesn't? This energy system, unlike solar, natural gas, petroleum, or coal is clean and cost-efficient. What's better about this system and most appealing, it's not part of the future, it's part of the present. Ocean thermal energy conversion technology has been researched and developed over the past somewhat 80 years. Lockheed Martin's O.T.E.C facility will officially go online in two when a half years. They have the capacity to begin building commercial size applications of this technology in six short years. Given the state of the world, over the next six years it is all but guaranteed that they will continue to break new revenue records, obtain new contracts, and see the fruition of some of their greatest military products. But soon they will be in the energy business too!
I don't see this stock doubling anytime soon, but value investing takes time and given their business model, their industries of involvement, their leadership, it's possible. In my opinion, it's very possible.
A few key interesting facts on the defense sector that I found appealing:
1. The defense sectors outperformed the S&P 500 almost every year for the past 10 years in a row.
2. Defense stocks have some of the lowest PE ratios of the quality stocks out there.
3. Even in recessions defense spending doesn't stop, in fact more often then not it increases.
4. With countries around the world becoming more and more developed, so do their militaries. It is less expensive for them and enables them to acquire better equipment and training by working with foreign defense contractors. This means defense companies have a viable market even outside of the "primary" customer base.
5. The F35 is the first stealth capable fighter jet that is able to be exported out of the United States.
6. On almost every defense company website I went to, and you should check this out too it will make scratch your head, as I clicked on press releases on their site I saw that almost on a weekly basis that they are chosen, selected, or won one grant for projects worth millions and in some cases billions of dollars.
7. Defense contracts are generally for many years, sometimes multiple decades that incorporate supply, support, updates and upgrades. 1 contract with 1 country can be worth $100 billion or more over the life of the agreement. Talk about repeat business.
The defense sector as a whole has taken some losses much has the overall market itself, but where we have seen companies lose 40, 50, and 90% of their value due to losses and an surmounting debt, this is not the case with companies in the defense sector. Often what I found from examining their balance sheets and company reports, that these companies were posting record profits and backlogs that other corporations would dream, maim, and kill to have.
I could go on and on, but the main point that I'm getting at here is that this is a place here that we the investors can make some money. So now the we found a sector, now let's pick a company. I'll save you the painstaking and boring process of breaking down each and every company and deciding which of the bunch is priced at a level where money can be made in the relatively near-term; and just tell you which one to me shines the most. But before I do, I have to say it was quite interesting and I learned, about a lot of things. Some that weren't pleasant also. But overall it was fun researching defense companies, I serve in the army myself, and they have some really cool toys coming out soon. But anyways, back to the subject, if I could only choose one to invest in and maybe even work with (a key thing to value investing), would be Lockheed Martin.
The company needs little introduction, it is one of the largest private defense contractors in the world and with its roots spanning all the way back to the first days of flight in the year 1909. Lockheed Martin is best known for their contributions to the military aviation world, however this company over the past two and half decades has grown far beyond their grassroots. Today's Lockheed Martin derives revenue from multiple lines of business, from aeronautics to space systems. They do over $40 billion a year in revenues and have backlogs that are larger then the annual revenues of some S&P 500 companies.
One thing worth mentioning, if you were to have bought Lockheed Martin stock on January 1 of 2000 when Lockheed Martin stock was around $21, you would have enjoyed an average return that exceeded 18%. Per Year, compound! And that's excluding dividends. Now had you did the same investment amount and invested in any of the funds that track or mimic the movement of any of the major indices, you would be down. You would be down a lot. Oh but the tech bubble really hit in 2000 and 2001 didn't it? Ok, I'll give you that, but it was pretty all settled by January 1, 2003 though right? In 2003 the DOW saw approximately a 25% gain, now that's a bounce back. Either way, you would still be down today. That is why I am a firm believer in active portfolio management. And believe me, or just look at someone's 401K, active portfolio management does not mean you will get true active management from buying mutual funds.
One of the key reasons that I chose Lockheed Martin was their diverse product lines. Besides jets, fighter planes, and helicopters, Lockheed Martin makes parts for spaceships, satellites, guidance systems (key component for all things military), and a lot of other things that go boom too; but did you know that Lockheed Martin is heading up the research for what may be the energy solution we've been looking for? I'll touch on this very briefly, but I encourage you to look it up yourself, it's quite fascinating. The energy system is called O.T.E.C. "O-Tek" as it is pronounced, is a revolutionary system that takes the energy stored in the ocean by the sun and converts it into energy that can be used to power our cities. Watch the video at the bottom of the post before you leave the blog!
Pretty interesting huh? That's one thing that lead to my choice of defense companies to be Lockheed Martin. They're not putting all their eggs in one basket and betting that we will continue to fight each other till the world ends. Even though that may happen, but what if it doesn't? This energy system, unlike solar, natural gas, petroleum, or coal is clean and cost-efficient. What's better about this system and most appealing, it's not part of the future, it's part of the present. Ocean thermal energy conversion technology has been researched and developed over the past somewhat 80 years. Lockheed Martin's O.T.E.C facility will officially go online in two when a half years. They have the capacity to begin building commercial size applications of this technology in six short years. Given the state of the world, over the next six years it is all but guaranteed that they will continue to break new revenue records, obtain new contracts, and see the fruition of some of their greatest military products. But soon they will be in the energy business too!
I don't see this stock doubling anytime soon, but value investing takes time and given their business model, their industries of involvement, their leadership, it's possible. In my opinion, it's very possible.
A note on investment recommendations
As I write and moderate this blog I have to emphasize a couple things. This blog is a personal project of mine and at no time should it be considered that my views are that of those of Fordham Financial Management. Before making any investment decision, you should consult your investment professional about potential risks and your overall investment objectives.
If for any reason you don't have one to speak with, well... I know one person you can talk to. ;-)
Now with that out of the way, let's get to my first pick.
If for any reason you don't have one to speak with, well... I know one person you can talk to. ;-)
Now with that out of the way, let's get to my first pick.
Thursday, July 9, 2009
First Post
Well first off I want to thank you for visiting my blog, I hope that you find my writings informative and come to visit and read them often.
The theme of my blogs will pretty much always revolve around the areas of finance and investing, as that is something I love and talk about all day anyways; so... why not just write about it "a little" at night too. To make it a little more personal and light to read, I will write my blogs as if I am speaking to you personally. Some of them may come out long, who knows; but I will always do my best not to stray and do as much as I can to keep you involved.
Lastly I want to send special thanks to a few people... well if you're reading this... chances are you know who you all are. Thank you for the opportunities you have granted me that has given me the experience and confidence that carry with every minute of every day. I would have never been who I am now, nor who will be, if it were not for your help, your guidence, and your friendship. And your business! :P
The theme of my blogs will pretty much always revolve around the areas of finance and investing, as that is something I love and talk about all day anyways; so... why not just write about it "a little" at night too. To make it a little more personal and light to read, I will write my blogs as if I am speaking to you personally. Some of them may come out long, who knows; but I will always do my best not to stray and do as much as I can to keep you involved.
Lastly I want to send special thanks to a few people... well if you're reading this... chances are you know who you all are. Thank you for the opportunities you have granted me that has given me the experience and confidence that carry with every minute of every day. I would have never been who I am now, nor who will be, if it were not for your help, your guidence, and your friendship. And your business! :P
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