vacplan

2010-04-03T04:51:00.000-07:00

My daughter, Dana arrived home to spend the Easter Holidays with us. I bought a new mouse for the HP portable. The old one generated clicks randomly that made the computer do things I didn't want it to do. Marriott sent us the package to buy a bronze week time share at Surfwatch. I don't want to send the money, but I want convenient beach access on Hilton Head, so I will spend the money. I will create a new blog just devoted to stocks.

ATPG Future

2010-03-24T07:56:00.000-07:00

I copied this from Devon Shire's Post on Yahoo's ATPG message board. I wanted to save this to remind myself to hold ATPG until all these event occur.

Important to keep your eyes on the prize.

Here is a very simple summary of ATP 2010 production.

Enter year 2010 at 13,600 BOE per day

Late January - Add 4,600 per day Gomez #4
Early March - Add 2,600 per day at Canyon Express
This week - Add another 2,600 per day at Canyon Express

Current pre Telemark - Roughly 23,000 BOE per day

So up 73% before Telemark even starts

Telemark - Roughly 30,000 BOE per day that will be fully on maybe in Q3 but certainly in Q4.

So we have 23,000 pre-Telemark plus 30,000 Telemark

That is 53,000 BOE per day or 3.89x the Q4 2009 rate

And that EXCLUDES the following:

1) A well being drilled at Canyon Express in Q2 (per recent presentation)
2) Gomez well MC711 #9 in Q4
3) Gomez well MC711 #10 early 2011
4) Gomez MC754 just acquired another 50% interest in this and the well is drilled already and is 1500 feet from the Innovator, could be Q4
5) Gomez MC710 - mirror image of 711 ATP mentioned they could be out there as early as Q4 this year

This company is in the middle of the huge production ramp up that will transform this company into a major developer of oil.

WpfPeople

2010-03-24T06:07:00.000-07:00

I am determined to learn how to program using WPF. Today I created the skeleton of a program called WpfPeople. It has a outer dockpanel containing a menu, status bar and a grid which fills the remaining space. It uses a gridsplitter to allow the user to resize the left and right columns of the grid.

Waiting on Buyers mortgage Commitment

2010-03-23T10:30:00.000-07:00

Last month we signed a contract to sell our home at 73 Fair Acres Court. Once the buyer signed the contract we drove down to Bluffton, SC to search for a house to buy. We had a buyer's agent name Mark Brenneman, a wonderful guy with lots of patience. We found a house we wanted at a home at 300 Picket Mill Blvd in the Mill Creek Development.
Today we are waiting on word that the buyer of our house has a mortgage commitment. Once we know he has a mortgage commitment, we are much more certain that the sale will go as planned because the mortgage commitment removes the possibility of the buyer canceling the contract because he could not get a mortgage.

Vector Vest Market Scorecard

2008-11-01T08:12:00.000-07:00

This week's Vector Vest strategy of the week presented the Market Scorecard as a format technique investor's can use to derive a bullish/bearish percentage to help them make investment decisions. Angel Clark, the Vector Vest presenter, guided through answering the questions and calculated a 58% bulllish percent. Depending on your individual risk tolerance this bullish percent may prompt you into investing. The three day rally has made the astute or lucky trader some easy money as the oversold stocks adjusted upwards. However, dire economic outlook will limit further upside.
Angel showed how to use Vector Vest to find the stocks in the fastest rising industries. Metal alloys has moved up strong. I own Hayes International. It looks like Boeing machinists will go back to work next week.
Angel suggested reading the November 10 and 24, 2006 weekly views.

Market Outlook, Sunday October 19, 2008

2008-10-19T13:46:00.000-07:00

The DJIA, since reaching a closing high of 14164 on October 9, 2007, has fallen 5312 points to close of 8852 on Friday, October 17, 2008 - 37.5 % decline wiping out more than 5 years on gains since June 2, 2003 when the DJIA closed at 8851. While the economic outlook appears bad, does the outlook justifies these distressed valuations? Will earnings decline 40% in the next few quarters to justify the decline in the DJIA.

A week ago, panic investors and force redemptions by institutions and hedge funds forced stock prices to recent lows. However, over the past week, share prices have increased. For example, AT&T closed at 22.48 on Friday, Oct 10, 2008 but a week later closed at 25.29 for a gain of $2.81 of 12.5 percent. Will this trend continue?
Analysts expect the credit crises to ease next week and as interest rates decline, stock prices should continue to rise. Beyond next week, I am uncertain of the future of stock prices as the economic outlook dims daily. While many companies will report decent earnings next week, they will also lower guidance for the fourth quarter. Maybe the easing of the credit market will balance the poor economic outlook and the stock market will stay in a volatile trading range.

I plan a defensive strategy by investing in high dividend companies such a utility companies such as AT&T, Morgan Kinder and Entergy. I plan to sell puts and buy on dips below current prices.

I am considering buying the iShares iBoxx $ Invest Grade Corp Bond. At $86 the fund yields 6.17% more than 2 percent better than the 10 year treasury yield. However, I am uncertain of the future outlook for interest rates. The federal government deficit will explode next year and this will keep long term rates high even as the Federal Reserve reduces the discount rate below the current 1.5%

Trends

Credit easing just starting
I notice that UPS will increase package delivery rates on January.
Fertilizer prices down but commodity prices starting to rise again.
OPEC threatens to cut back on oil output.
Boeing machinists still on strike.
The NFIB Index of Small Business Optimism rose 1.8 points to 92.9 in September continuing one of the longest strings of recession level readings in the history of the survey (started in 1973), but headed up for the second month in a row.

Oct 18, 2008 PE ratios when risk abates

2008-10-18T11:57:00.000-07:00

Saturday, October 18, 2008

PE ratios when risk abates.

When risk abates, investors should push the price earnings (PE) ratio higher even if the earnings outlook remains the same or even declines slightly. Since the PE is the ratio of the price to annual earnings per share, if the earnings per share stays the same, stock prices should rise.

The price earning ratio provides a measure of the risk adjusted value of future earnings of a company. Investors bid up the price of a stock to give it a high PE because they believe the company has outstanding future earnings potential. Stocks with a low PE, investors’ judge, have a high risk regarding the potential for future earnings or earnings growth. Investors as a group continually change their mind and the up and down movement of stock prices reflect the continually changing consensus judgment about the future earnings outlook for the company.

In early September, 2008 investors clearly understood the adverse effect of the credit crises on the economy and decided that the future looked bleak. They anticipated declining company sales and profits as the credit crises threaten to freeze business activity. They sold stock causing a general price decline that may have ended on Friday, October 10, 2208 when the DJIA closed at 8451. The DJIA declined 3081 points or about 27% of from the closing price of 11532 on September 3, 2008.

Today many stocks have extremely low PE ratios reflecting the general fear that future earning are at risk. For example, the PE ratio of AT&T, based on earnings of $2.22 a share, dropped from about 15 on September 3, 2008 to about 11 on October 18, 2008. Many sophisticated investors, suggest that today’s low PE ratios represent buying opportunities because while earnings will probably decline for 3 to 6 months, by investing in companies with sound business models, you have the potential for substantial price appreciation as earnings and PE ratios rebound to normal levels. In other words, as earnings grow and risk abates, stock prices will soar.

Consider AT&T as an investment today. Communication remains essential for most of the United States population and businesses. AT&T provides the communication infrastructure that provides nation wide communication. Its substantial competitive advantage gives confidence that AT&T will continue to thrive through the economic slowdown. When the economy recovers next year, the stock price of AT&T will reverse its recent price decline.

For instance, analysts still estimate that AT&T will earning more that $3 in the year 2009. If the PE ratio for AT&T goes back to 15 and it does earn the estimates for 2009, then stock price of AT&T could soar over the next year from the October 18, 2008 price of $25.29 to 45.rewarding the patient investor with a 60% price appreciation plus $1.60 in annual dividends.

Economic recovery remains the key point you need to consider when making an investment today. Yet the timing and extent of economic recovery appears unpredictable. That is the risk. Just remember, that big profits justify the risk taken.

durable competitive advantage

2006-11-21T04:57:00.000-08:00

I watched Buffet on CNBC last night. He looks to invest in undervalued companies with durable competitive advantage. It made me think of Lifetime Brands (LCUT) which sell kitchen and home goods with well known brands. At about $20 with earnings set to explode by 50% to the upside this looks like a very good long term investment.

stockcharts and SPY

2006-09-30T08:42:00.000-07:00

For years I have used telechart from wordens to view stock charts. Telechart download the prices to my PC and rapidly displays colorful and insightful charts. It has many powerful features such as watchlists, scans and personal criteria formulas that help me find stocks that I want to invest it. I would never give it up. However, recently a new friend introduced me to stockcharts. I open a chart of SPY, the ETF for the S&P 500, and set period to monthly. The Monthly SPY shows that since March 13, 2003, the SPY has soared 65% in 3 1/2 years from 81.06 to today's 133.58. Maybe the best investment strategy, as many people believe, is to buy the S&P 500. I wonder if the S&P 500 will reach 2000 sometime int 2010.
For now, the SPY looks like it wants to move higher after a recent flat period.

Stock Market to move higher

2006-09-12T19:11:00.000-07:00

With oil declining, interest rates stable, the economy poised for slow, steady growth and a positive earnings trend, the stock market should move higher. As energy stocks decline, one wonders what to buy now to profit from the coming upward move in the stock market. I favor SPY.
The low price volatility as indicated by the VIX indicates the market's adversion to risk. It appears that investors now favor stocks with predictable earnings, rather than those with the potential for explosive gains. They favor companies such as GE, Home Depot rather than energy stocks which have the potential for triple digit gains over the next year.

ACAS what to change how investors think about it

2006-09-07T18:48:00.000-07:00

ACAS management seeks to change the way investors value ACAS. Currently, investors price ACAS based on its high yield. Based on today's close ACAS yield's 8.80%. In the future, ACAS management wants investors to value ACAS on its earnings growth and as a publically traded manager of funds of private assets. Today, September 7, 2007, ACAS has a price to earning ratio, PE, of 7. In comparison, the T Rowe Price Group, which manages mutual funds, has a PE of 24. Should investors change the way they value ACAS, a substantial price appreciation could occur while the dividend increases slowly and yield declines. To change investor perception on its value, ACAS intends to create private funds. It has already created European Capital which could return $47 million in fees in 2006 to ACAS. ACAS intends to create more private funds, using its own assets and outside sources. It has plans to create private funds in the following categories: Finance, Real Estate, Technology, Energy and special situations. ACAS considers its data base of potential buy out candidates, its investment selection skills, its sophisticated staff and company management as the key factors needed execute this plan successfully. For nearly a year, ACAS has taked about this plan, yet aside from European Capital, it has failed to execute, although they have beefed up staff for execution. I think the time is near and when institutional investors observe the execution, then the share price will rise dramatically from today's close of $36.76.

Outlook for September

2006-09-07T05:17:00.000-07:00

Profit takers strike quick these days. After a short rally in late August, the market turned down yesterday on higher volume. I expect more of the same today and in the coming weeks. Technically the market needs to build a base for expected price gains to come in the fourth quarter. Although analysts project profit gains in the low teens, I think the market has a show me attitude. Beyond September, lower oil prices (today $67 from $78 just over a month ago) and stable interest rates, should boost the consumer part of the economy. As housing appears the blackest now, it could start to bottom out over the next few months. Retiring baby boomers still need to find a cheaper place to live and they will sell there houses up north and buy a home down south. That should eat up southern Florida's over supply of homes.
By the way CVS and Walgreen's reported that drug store sales continue to soar. With its longer PE compared to Walgreen, CVS has more room for price appreciation.

Solar Energy Stocks

2006-09-04T06:02:00.000-07:00

Ground Floor Stocks sent me a solicition to subscribe to their newsletter. The solicition pronounced that "the solar market is poised to explode" and recommended Solor Enertech, Ltd at a price of $1.72. The price friday was $1.45. However, recently read that AMD plan to make solar cells and that Governor Schwarzenegger has a bill that offers $2.9 billion investment by to put one million solar energy systems in California Homes over the next 10 years.I didn't subscribe to the newsletter but I did investigate solar power and the three solar energy companies mentioned in the solicition: Suntech , SunPower and Evergreen. To meet the expect growth in demand, all three companies have agressive expansion plans.

Suntech, located in China, become has one of the world's top 10 manufacturers of PV cells.

Sunpower( Nasdaq: SPWR) manufacturs high-efficiency silicon solar cells and sun panels for residential and commercial systems in North America. Cypress Semiconductor Corp. (NYSE: CY) owns a majority interest in SunPower. Suntech plans to quadruple output solar panels by the end of 2006. In 2005 the company lost 22 cents per share, but 2006 EPS is projected to soarto a profitable 45 cents and 79 cents in 2007. At the current price of $31 this looks like good investment to participate in the solar energy boom.

Evergreen Solar develops and manufacture of photovoltaic(PV) modules and uses a proprietary crystalline silicon technology known as String Ribbon. It owns 33% stake in EverQ, which plans to increase its output by 10 fold over the next 3 or 4 years to meet demand. The company has lost money each of the past 5 years, but expects to loss just 10 cents in 2007 compared to 40 cents last year. Potential for tremendous sales growth and the eventual profits provides the spectulative play. Since 2002 the shares have risen 10 fold from about $1 to $10 in September, 2006 as shown in the stock chart on the right. While I expect the recent excitement with solar energy will give the stock a pop, I believe the current price fully reflects profit potential of the next 3 to 4 years, investors will hold the price steady until they see the actual profits. I believe the rig drillers offer a better buy with earnings projected to grow in the triple digits for the next couple of years. More about this later.

Market Outlook September 3, 2006

2006-09-03T06:21:00.000-07:00

Despite the slowing of the US economy, the enormous trade deficit, the decline in the housing industry, history of stockmarket declines in September and October and the internation political threats, I am slightly bullish of the stock market. Many excellent stocks have PE ratios in the low teens, such as Home Depot. With the recent decline in mortgage rates and oil prices, energy and interest should reduce future inflation rates. This bodes will for the stock market as it should make stocks a more attractive investment than bonds simply because earnings go up and bond interest rates stay stable.

I like GE because it has predictable earnings growth, and I predict it will increase the annual dividend from $1 to $1.08. The price of GE has decline since December, 2005 from a high of $37.38 to Friday's close of $34.02. In the past two weeks, the stock price has crossed the moving average to the upside although volume has declined. While the stock price has declined, earnings have increased from $1.72 in 2005, to an estimated $1.97 in 2006 and $2.25 in 2007. I believe that the increase in interest rates during the past, year caused funds and institutions to shun GE, but now that interest rates have stablished I believe many will find GE a low risk and an attractive investment . S&P gives GE a 4 star rating and a buy recommendation, although Zacks ranks it has a hold, but has a target price of 38.90. I have a target price of $37.50 by the end of December, 2006. This is a 10% capital gain plus the dividend in 4 months.

Drilling rig landlords

2006-07-08T06:29:00.000-07:00

I bet on the drilling rig landlords such as Atwood (ATW), Diamond Drilling (DO) and TransOcean (RIG) and Friday afternoon they took a big drop. The general stock market collapsed with the DJIA falling 134 points and oil prices falling more than a $1 to $74. I am still confident in the outlook for the drilling rig landlords. I expect the prices to rise on Monday, if they don't, lower prices will force me to sell. I would buy back after the panic subsidies

First entry

2006-07-06T16:24:00.000-07:00

I don't know who would want to read about what I think but I like to write my thoughts every once in a while, so now the world can see what I think.