SMCI - >>> Meet the New Stock-Split Stock That Outperformed Nvidia in the First Half and Wall Street Thinks Could Almost Double


by Adria Cimino

Motley Fool

Sep 20, 2024


https://finance.yahoo.com/news/meet-stock-split-stock-outperformed-084000909.html


Nvidia has been a tough act to follow in recent years. The artificial intelligence (AI) chip giant has delivered triple-digit increases in earnings quarter after quarter, and the share price has followed. Nvidia stock has soared more than 2,400% over the past five years, and considering the company's focus on innovation, this stellar performance may continue.

Though Nvidia has garnered the greatest share of investor attention in recent times, another tech player actually outperformed this AI powerhouse in the first half of the year. And this company followed in Nvidia's footsteps recently by announcing a stock split, a move to bring a high-flying share price down to earth -- and make the stock more accessible for a broader range of investors.

Now, Wall Street predicts this player's gains may be far from over. Let's meet the new stock-split stock that analysts think could nearly double within the coming 12 months...
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A triple-digit first-half gain

And this stock is Super Micro Computer (NASDAQ: SMCI), a company that saw its stock price soar 188% in the first half, surpassing Nvidia's 149% increase. Though individual forecasts vary, the average Wall Street estimate calls for the stock to climb 90% from today's level.

It's important to note that this once high-flying stock has been wading through difficult waters in recent weeks. A short report released by Hindenburg Research, alleging troubles at the company, has weighed on the shares. In an unrelated move, Supermicro delayed the filing of its 10-K annual report, and this has represented an additional headwind.

I see these as short-term pressures, but they don't change Supermicro's long-term story. And considering the 20% decline in the stock since the short report, it looks dirt cheap right now -- it trades for only 13 times forward earnings estimates, down from more than 45 times earlier in the year.

In recent days, some analysts have highlighted the potential of Supermicro. For example, Needham rated Supermicro a buy in new coverage of the stock -- and Needham expects a gain of 37% in the months to come.

Why should we be so optimistic about Supermicro? First, the company has proven its ability to dominate in the area of full rack scale solutions for data centers. Supermicro's servers and other products share many common parts so the company can more quickly build a particular item to suit a customer's needs. The equipment maker also works very closely with all of the top chipmakers -- including Nvidia -- so that it can immediately include their innovations in its products. This has helped revenue in one single quarter surpass annual revenue as recently as 2021.

Supermicro's big opportunity

Second, Supermicro now faces a major opportunity that could launch a whole new wave of lasting growth for the company. One of the biggest problems facing the data centers of today and tomorrow is the fact that AI workloads produce excessive heat. Supermicro's direct liquid cooling (DLC) technology, once a slow-growth business, now promises to offer explosive growth.

The company predicts that within the coming 12 months, 25% to 30% of data centers will be equipped with DLC, and Supermicro will dominate this market. At the same time, Supermicro is preparing for demand for DLC and its equipment in general as it brings online its Malaysia facility -- one that will focus on volume and speed.

Considering forecasts of an AI market to reach $1 trillion by the end of the decade, and the key role of data centers in all of this, Supermicro's revenue could continue to climb for quite some time.

As for the stock split, Supermicro will trade at its new split-adjusted price as of Oct. 1. This won't change anything fundamental about the company or stock -- valuation and market value remain the same. So, it won't act as a catalyst for share performance, but it is a positive move as it will make it easier for more investors to buy the stock over time.

All of this represents a lot of positive points for Supermicro, setting the stage for major growth potential -- and making it a fantastic stock to buy on the dip.

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Celsius - >>> 1 Growth Stock Down 64% to Buy Right Now


by James Brumley

Motley Fool

Sep 21, 2024


https://finance.yahoo.com/news/1-growth-stock-down-64-105500499.html


There's no getting around the fact that Celsius (NASDAQ: CELH) stock has been tough to own for the past several weeks. Share prices are down a hefty 64% from May's peak -- and for good reason as sales growth is slowing. But that slowdown was to be expected given this up-and-comer's meteoric penetration of its market. And that's the crux of the buying opportunity created by the pullback.

While the mathematical top-line growth may be slowing, it's still impressive growth, and the Celsius story is still a compelling one. The stock's simply suffering some predictable (but temporary) growing pains. Here's why it's a buy right now.

Celsius was punished for flying too far, too fast

On the off chance you're reading this and aren't familiar, Celsius is an energy drinks company in the same vein as Monster Beverage or Red Bull. It's distinctly different from the industry's two dominant players, however. Whereas Red Bull and Monster have been around for years and have established roots within the extreme-sports and casual energy-craving crowd, (relatively) latecomer Celsius largely aims at the fitness-minded market. It promotes itself as "the better-for-you, zero-sugar alternative to traditional energy drinks."

This tack has proven successful since the company turned up the heat on its marketing efforts in early 2018 when current CEO John Fieldly took the helm. Since then, annual sales have soared from around $400 million to $1.5 billion, en route to more than $2 billion in 2026. Fieldly clearly has his finger on the pulse of the business; a distribution partnership with PepsiCo certainly seems to have helped as well.

Celsius stock, however, has been run through the same predictable ringer most stocks of young, high-potential companies are regularly pushed through: dizzying euphoria followed by a head-on collision with reality.

What gives?

As it turns out, although Celsius' products bring an exciting alternative to the energy drinks market, its (much) bigger competitors aren't simply going to roll over. Monster, for instance, recently doubled down on social media marketing; the decision seems to be paying off. Celsius' red-hot growth rates of the recent past are also just plain tough to maintain, falling from a year-earlier clip of 112% to year-over-year growth of 23% for the second quarter ending in June. Investors weren't quite sure how to process such a sudden and sweeping change. In fact, they panicked.

As is so often the case with such an emotionally charged scenario, the sellers overshot their target.

Celsius is gaining traction

Oh, don't misread the message. Even if it's oversold, stepping into Celsius' stock isn't for the faint of heart. The company is still finding its footing. Shares are still volatile as a result.

For speculators who can stomach the risk, however, Celsius is exactly where it should be at this point in time, having finally proven it's a contender.

Chief among the bullish clues is the fact that the company is now consistently profitable ... a corner turned in earnest early last year. It's increasingly profitable, too, and should continue to grow its bottom line at an even faster rate than its top line is improving.

Celsius Holdings' top and bottom lines are expected to continue growing at least through 2026. And this growth runway is longer than most investors might realize.

To date, the company has almost exclusively focused on the U.S. market. Now that it's getting real domestic traction (growing its U.S. grocery- and convenience-store market share from less than 5% a year ago to more than 10% now), it's setting its sights overseas. Celsius debuted in six countries other than the United States just this year. These include Canada and the U.K. Australia and France are next, with launches expected in both before the end of the year.

This expansion plugs the company into more of the global energy drink market, which is expected to grow at a strong, single-digit pace for the next several years as more consumers shun sugary sodas in favor of more functional beverages. This shift could be particularly pronounced within the United States, according to market research outfit GlobalData, which notes that Celsius already has a strong foothold by offering the market something unique within the functional drinks arena.

Then there are the "adjacent categories" of products Fieldly is considering, like food and bottled water. The company currently has no entry into these consumer-goods categories -- and may never. It's certainly an interesting growth prospect though, leveraging its differentiated brand name.

Celsius stock isn't for everyone, but...

Again, this ticker may not be a great fit for everyone's portfolio. While arguably undervalued, the company is also a work in progress. It's difficult to break into a market dominated by a well-established duopoly, even if Celsius is clearly winning at least some market share.

To the extent stories and trajectories and differentiation count, however, Celsius Holdings offers promise to risk-tolerant investors. The big pullback since May was largely driven by shock. Once more investors recognize the company is still making good forward progress, the underlying pessimism should return to reasoned optimism.

This might help: Despite several weeks' worth of steady selling, the analyst crowd keeping tabs on this stock isn't deterred. The vast majority of them still rate it as a strong buy, collectively sporting a consensus price target of $50.36. That's nearly 50% better than the stock's present price, which isn't a bad place to enter a new trade.

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Pfizer - >>> More than meets the eye

https://finance.yahoo.com/news/3-dirt-cheap-stocks-buy-113600626.html

Keith Speights (Pfizer): Pfizer has been a big loser in recent years, although it has eked out a meager gain in 2024. However, I believe there's more than meets the eye with this big drugmaker.

You can blame much of Pfizer's woes on the declining sales of its COVID-19 products. I don't anticipate the company will ever again see the booming numbers of 2021 and 2022. But I also think 2024 could be a trough year for Pfizer's COVID-19 vaccine sales.

The other big challenge for the company is the impending patent expirations for several of its top products. Unfortunately for Pfizer, the list includes blockbuster drugs Eliquis, Ibrance, Vyndaqel, Xeljanz, and Xtandi.

Pfizer isn't being blindsided by this patent cliff, though. It has invested in developing new products, with respiratory syncytial virus (RSV) vaccine Abrysvo especially standing out. The company has also used the tremendous cash generated from its COVID-19 vaccine during the worst of the pandemic to fund key acquisitions, including its 2023 purchase of Seagen. As a result, Pfizer should be able to deliver solid growth in the coming years despite losing patent exclusivity for multiple products.

Meanwhile, the pharma stock is priced at a discount. Pfizer's shares trade at only 10.6 times forward earnings. That's much lower than the S&P 500 healthcare sector's forward-earnings multiple of 19.6.

If you're looking for another reason to buy this dirt-cheap stock, check out its dividend. Pfizer offers a forward-dividend yield of 5.65%. Even better, the company's management remains committed to growing its dividend payout over time.

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>>> Hershey is turning its candy into energy drinks and protein powders with C4


CNN Business

by Jordan Valinsky

Sep 18, 2024


https://finance.yahoo.com/news/hershey-turning-candy-energy-drinks-130019084.html


With its line-up of sweet snacks, Hershey isn’t known as a purveyor of diet foods. However, the company’s newest products are made specifically for those on a fitness kick.

As the use of weight-loss drugs — notably Ozempic and Wegovy — grows, the 130-year-old confectionery company is adjusting to this new era by pushing further into the wellness category with protein powders and energy drinks in popular candy flavors.

The Hershey Company (HSY) has struck a deal with C4 Energy, a top-selling supplement brand that has gained popularity as people have looked to build muscle and work out more following the pandemic. Hershey’s namesake milk chocolate and Reese’s peanut butter and chocolate will soon be sold as protein powders and its Jolly Rancher candies will be turned into bubbly energy drinks.

“What’s great about this partnership is that we get to tap into these brands that are more than 125 years old and are very nostalgic,” said Doss Cunningham, CEO of C4’s parent company Nutrabolt. “On the flip side, this is a great opportunity for us to reach new audiences.”

The partnership should help C4, the fourth-best-selling energy drink brand in the United States, differentiate itself in a $21 billion market dominated by trendy up-and-comers, like Celsius and Ghost, but also older companies that remain popular, notably Red Bull and Monster. Energy drinks, which are most often bought by millennial and Gen Z customers, have “a lot of affinity” with Hershey’s products, Cunningham told CNN.

Rolling out this week across major US retailers, including HEB, Amazon and C4’s website, the new canned energy drinks are based on three popular Jolly Rancher flavors: blue raspberry, green apple and watermelon. A 12-pack costs $27.99.

The deal then expands in October when whey protein powder, in Hershey’s milk chocolate and Reese’s peanut butter and chocolate flavors, hits shelves, with prices starting at $29.99 for the smallest size. A pre-workout powder based off of Bubble Yum gum will also be introduced.

C4 has already had success with using flavors from Skittles, Starburst and Popsicle for its other energy drinks.

“We can reach new consumers that are perhaps new to the sports nutrition space or the energy drink category that can discover C4 through one of their beloved brands,” Cunningham said.

Partnering with food makers that have perfected flavorful recipes is becoming popular among nutrition companies because “it’s a way to help entice consumers to try them with flavors that they are comfortable or accustomed to, considering a lot of these powders are notorious for having a weird and unpleasant taste,” Andrea Hernández, founder of Snaxshot, a food and beverage insights platform, told CNN.

For Hershey, moving further into nutrition might help offset falling sales in its candy business, which reported a 17% drop in revenue in its most recent earnings report. In 2019, Hershey bought One Brands, which makes low-sugar, high-protein nutrition bars, for $400 million. And its rivals are adjusting as well — for example, Mars, which bought snacking giant Kellanova to expand its portfolio beyond sugary treats.

Whether it’s moving into nutrition or making big acquisitions, Hernández said candy companies are exploring new ways to be relevant, like Hershey’s approach, which “can ultimately help Hershey’s get a healthy halo of sorts.”

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Derf, The LNC chart set up could be ready to move back up to 35-36 (?), and thus re-confirm the 6 month uptrend. I thought it was rolling over for sure, but we'll see where it goes over the next few weeks. Nice call so far :o)



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Hi Derf, >> CLMB <<

It looks like the chart could use a pullback at some point, after the big summer runup. Maybe back to meet the rising 50 MA in a few weeks ~ 90 (?), but just a guess. It's also way above the 2019-2024 trendline, so I figure it may have gotten ahead of itself in the near term. Also, since 2019 it has periodically pulled back to test the 200 MA before resuming the uptrend. But longer term it looks like a nice buy / hold. Unusual to see a microcap with such a nice LT chart.

Btw, thanks for the heads up on INTC. The chart setup does look interesting as a bottom play. Considerable uncertainty remains for the company, with big expenses needed to build the new domestic foundries, etc. But the US govt needs domestic chip manufacturing in order to to reverse the dangerous over-reliance on Taiwan / Asia, and a 're-tooled' Intel could be a big part of the solution. Also it appears companies are eager to supply capital, or to acquire Intel or its assets. I added INTC to my turnaround list and took a modest position. Near term it looks like a test of the 50 MA, and we'll see how things go after that. First needs to get through the 50 MA, then the 2022-23 lows area of 23-25. Hopefully the ultimate bottom has been put in, but still early so plenty of risk.



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Were you the one asking me about the current S&P P/E avg??
Anyway, saw this
S&P 500 Forward P/E 23.9
MSCI EAFE 14.8
MSCI World 20.6

BTW, I noticed today many commercial REITS getting upgraded.

I bought some $CLMB this morning. Not as much as I'd like to, but seems I'm a bit cash poor at the moment, which scares me a bit as probably a bad indicator.

I do own a Lincoln variable annuity I bought some years past. In truth, they haven't kept up with the other companies with all the new features as interest rates rose, but that's a good thing for the company. Too many of these annuity companies take too much risk. (which is good for the annuity owner, bad for the insurance company).
BTW, I typically try to stick to a rule that if a company starts wasting their money on stadium naming rights, dump them. Having a stadium name is a total waste of money and typically done for somebody's ego.

I do own AVGO as well. You may want to look at QCOM as a bounce back play. Its sitting on its support line

Intel - >>> Did Amazon Just Save Intel Stock?


by Brett Schafer

Motley Fool

September 21, 2024


https://finance.yahoo.com/news/did-amazon-just-save-intel-113300961.html


It can pay to have rich friends.

This is especially true when that friend runs the largest cloud computing business in the world and you are a manufacturer of computer chips. That is why Intel (NASDAQ: INTC) stock soared after the company announced a new partnership with Amazon (NASDAQ: AMZN) for custom chip designs for its Amazon Web Services (AWS) subsidiary.

Intel stock shot up from around $19 to $21 on this news, stemming painful losses that shareholders have incurred for the last few years. Intel shares are down 70% from its five-year high as the company struggles to build its new foundry business and compete in the age of artificial intelligence (AI). Today, Amazon is stepping up to the plate and saying it will invest in Intel's computer chip business for the long haul.

Does this make Intel stock a buy after falling 70% from recent highs?

Partnerships for chip design

On Sept. 16, Amazon and Intel announced a co-investment in custom chip design intended to cost billions of dollars. In other words, both companies have agreed to pool resources to design computer chips together. Amazon will also be spending $7.8 billion in central Ohio on data center development. This is close to where Intel is building a $20 billion semiconductor manufacturing plant.

The relationship between Amazon and Intel is tightening. This makes sense for two key reasons. First, Intel is one of the largest suppliers of computer chips for AWS data centers. Amazon spends billions of dollars with Intel each year, so if they can improve chip designs, both companies will make money. Second, Intel has lost market share during the AI boom of the last few years to Nvidia and Advanced Micro Devices.

Nvidia specifically is pulling far ahead in AI and has increased its pricing to customers such as Amazon. Amazon likely sees this chip design partnership with Intel as a way to increase competition with Nvidia, which will hopefully lower its computer chip costs. Intel can win by stealing market share back from Nvidia.

An independent foundry

Intel's business has suffered in recent years due to its vertically integrated chip manufacturing business. Nvidia and AMD do not make computer chips, they simply design them using software. They are made by Taiwan Semiconductor Manufacturing (TSMC), which operates what is known as a foundry business model. This company serves as a manufacturer of semiconductors for multiple parties, but never competes directly with its chip-designing customers. TSMC has aggregated a huge portion of the semiconductor manufacturing market and has taken the crown from Intel as the most advanced developer in the entire sector.

A few years ago, Intel began planning to build its own foundry business to compete with TSMC. So far, the business has not done well. Last quarter, revenue was $4.3 billion, not growing, and the segment had a $2.8 billion operating loss. Intel is playing the long game with the foundry business. It has plans to invest tens of billions of dollars in the United States for manufacturing in places such as its Ohio facility. With the CHIPS Act from the U.S. government, it should be eligible for subsidies on this spending.

This bet needs to work out, because these capital investments in new manufacturing facilities are burning a hole in Intel's pocket. Free cash flow was negative $12.6 billion in the last 12 months and has turned sharply negative after being positive for decades. In order to revert to positive free cash flow, Intel will need to procure spending on chips from its partners, such as Amazon (a current customer of TSMC) for its foundry business.

At current prices, it is hard to value Intel stock. The company is going through a heavy investment cycle and is currently unprofitable. It trades at a market cap of $88.6 billion, which looks cheap compared to its historical cash-flow generation of over $10 billion per year before its competitive struggles.

I think this Amazon partnership is a positive development, but it doesn't save Intel's business and/or stock. The company has been a laggard in the semiconductor market for several years now. It is making a risky bet to transition its business over to the foundry model in the middle of that market-share slump. It is not clear whether this will be successful. In the meantime, it is burning over $10 billion a year in free cash flow.

However, if Intel is successful and becomes the American version of TSMC, there is a lot of upside for the stock. TSMC is closing in on a $900 billion market cap, which is 10 times the size of Intel today. It is not implausible for Intel to reach this valuation if the business model transition is successful.

Investors looking to bet on Intel should make it a small position in their portfolios, given the high upside and large downside potential of the stock.

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Derf, You mentioned Intel, and it looks like there are some interesting developments (see article in previous post), including buyout interest from Qualcomm, and also a potential $5 billion investment in Intel by Apollo Global Mgt. So Intel does sound interesting as a potential contrarian value play, especially with the stock down so much.

Here is another article excerpt (below) mentioning Intel's desire to raise cash to overhaul itself. It also looks like Amazon recently did a sizable deal with Intel (see next article), so a lot going on. Intel is apparently looking to compete in the chip foundry business with Taiwan Semiconductor, but it will require massive capital investment. Analyzing the stock sounds like a job for the Oracle, Warren Buffett :o)


>>> Broadcom Inc. (NASDAQ:AVGO)

Number of Hedge Fund Holders: 130

https://finance.yahoo.com/news/broadcom-inc-avgo-why-analysts-172441735.html

Broadcom Inc. (NASDAQ:AVGO) supplies semiconductor infrastructure software solutions. Latest reports suggest that the company is not considering a potential takeover bid for rival Intel. News publication Bloomberg, citing people familiar with the matter, reports that Broadcom was assessing an offer for Intel but has put the brakes on the project, for now. Intel is pitching large parts of the business, including foundry, to potential buyers as it seeks to raise cash for a total overhaul. Several chip firms, including Qualcomm, are reportedly interested in buying parts of the Intel business. Such a takeover would invite scrutiny from regulators, evidenced by the fact that authorities shut down a potential merger between Broadcom and Qualcomm in 2018.

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Intel - >>> Apollo to Offer Multibillion-Dollar Investment in Intel


Bloomberg

by Liana Baker, Ryan Gould and Ian King

September 22, 2024


https://finance.yahoo.com/news/apollo-offer-multibillion-dollar-investment-205009294.html


(Bloomberg) -- Apollo Global Management Inc. has offered to make a multibillion-dollar investment in Intel Corp., according to people familiar with the matter, in a move that would be a vote of confidence in the chipmaker’s turnaround strategy.

The alternative asset manager has indicated in recent days it would be willing to make an equity-like investment of as much as $5 billion in Intel, said one of the people, who asked not to be identified discussing confidential information. Intel executives have been weighing Apollo’s proposal, the people said.

Nothing has been finalized, the size of the potential investment could change and discussions could fall through, resulting in no deal, the people added.

The development comes as San Diego-based Qualcomm Inc. floats a friendly takeover of Intel, people with knowledge of the matter said on Saturday, raising the prospect of one of the biggest-ever M&A deals.

Representatives for Apollo and Intel declined to comment.

Under Chief Executive Officer Pat Gelsinger, Intel has been working on an expensive plan to remake itself and bring in new products, technology and outside customers. That initiative has led to a series of worsening earnings reports that have undermined confidence in the initiative and knocked tens of billions of dollars off its market value. While Apollo may best be known today for its insurance, buyout and credit strategies, the firm started out in the 1990s as a distressed-investing specialist.

The companies already have a relationship. Santa Clara, California-based Intel agreed in June to sell a stake in a joint venture that controls a plant in Ireland for $11 billion to Apollo, bringing in more external funding for a massive expansion of its factory network.

Apollo also has other experience in the chipmaking space. Last year, the New York-based firm agreed to lead a $900 million investment in Western Digital Corp., buying convertible preferred stock.

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Johnson & Johnson - >>> J&J unit files for bankruptcy to advance $10 billion talc settlement


Reuters

September 20, 2024

By Dietrich Knauth


https://finance.yahoo.com/news/j-j-subsidiary-files-bankruptcy-193903276.html


(Reuters) - A Johnson & Johnson subsidiary filed for bankruptcy for a third time on Friday as the healthcare giant seeks to advance an approximately $10 billion proposed settlement that would end tens of thousands of lawsuits alleging that the company's baby powder and other talc products caused cancer.

J&J faces lawsuits from more than 62,000 claimants who alleged that its baby powder and other talc products were contaminated with asbestos and caused ovarian and other cancers. To stop those lawsuits, J&J subsidiary Red River Talc filed for bankruptcy protection in a federal bankruptcy court in Houston.

The company has denied the allegations and has called its products safe.

Erik Haas, J&J's worldwide vice president of litigation, said on Friday that the settlement is "fair and equitable to all parties" and that 83% of current talc claimants voted for it.

The settlement proposal has divided attorneys who represent cancer victims. Opponents of the deal said they will quickly ask the court to dismiss the bankruptcy or transfer it to New Jersey, where courts have twice rebuffed J&J's attempts to end the litigation in a so-called "Texas two-step" bankruptcy.

Andy Birchfield, an attorney opposed to the deal, said that J&J is gaming the bankruptcy system in an attempt to underpay tens of thousands of cancer victims.

"We view this so-called vote as another fraudulent effort by J&J to manipulate the bankruptcy process and minimize the legitimate claims of ovarian cancer victims," Birchfield said.

Other attorneys spoke in support of the deal, including Allen Smith, a lawyer who had previously represented 11,000 claimants in partnership with Birchfield's law firm.

Smith said the settlement offer "finally provides my clients reasonable and fair compensation. It's now time to go to work and get them compensated as soon as possible."

The "two-step" maneuver employed by J&J involves offloading liabilities onto a newly created subsidiary that then declares Chapter 11, a type of bankruptcy that involves a reorganization of assets and debts under court supervision. The goal is to use the proceeding to force all plaintiffs into one settlement, without requiring J&J itself to file for bankruptcy.

Bankruptcy judges can enforce global settlements that permanently halt all related lawsuits and forbid new ones.

Outside of bankruptcy, any settlement J&J reached with some claimants would still leave holdouts or future plaintiffs with the right to sue - and leave the company exposed to potential multibillion-dollar verdicts that encouraged it to use a two-step in the first place.

To improve its chances in a third bankruptcy effort, J&J asked plaintiffs to vote on its proposed deal ahead of time to ensure that it has enough support for its plan to succeed. J&J needed more than 75% to back the plan for a bankruptcy judge to impose the deal on all plaintiffs.

GYNECOLOGICAL CANCER CLAIMS

J&J's third attempt at a bankruptcy settlement also differs from its previous efforts in part because it focuses only on ovarian and other gynecological cancer claims, building on J&J's previous settlements with state attorneys general and people who had sued after developing mesothelioma, a rare form of cancer linked to asbestos exposure.

J&J's proposed settlement would pay talc claimants about $10 billion over 25 years. The present value of the settlement is roughly $8 billion after J&J recently agreed to kick in an additional $1.1 billion to the settlement fund and pay $650 million in legal fees to attorneys that had previously opposed the settlement offer.

The company has been engaged in a bitter fight with lawyers opposing its third attempt to settle the litigation in bankruptcy.

J&J's bankruptcy strategy still faces legal hurdles. These include a June U.S. Supreme Court decision involving Purdue Pharma's bankruptcy, court orders dismissing its previous efforts and proposed federal legislation aimed at preventing financially healthy companies like J&J from benefiting from bankruptcy protection.

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Derf, The LNC chart is hanging in there above the 50 MA. Just curious how you found this stock? The name seemed familiar, and then I realized it's based near Phila, and the Eagles play in the Lincoln Financial Field Stadium. Anyway, the long term chart doesn't fit with my usual criteria, but just curious if you have some connection to the company? I noticed that some of the periodic daily volume spikes seem somewhat unusual.



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Derf, Here's the quarterly results press release from CLMB (link below). The long term chart indicates they are doing something right, and market cap is still a miniscule $457 mil. The chart may need a pullback / consolidation before too long, but I'm figuring it's a worthy buy / hold for the longer term -


>>> Climb Global Solutions Reports Second Quarter 2024 Results and Announces Acquisition of Douglas Stewart Software & Services, LLC


Climb Global Solutions, Inc.

Aug 6, 2024


https://finance.yahoo.com/news/climb-global-solutions-reports-second-200500904.html

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Full Article - https://investorshub.advfn.com/boards/read_msg.aspx?message_id=175049292


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GEEZ! $CLMB looks like a crazy good chart! I will buy some if I remember when the market opens. Gotta run out this morning.
Wish you had mentioned it around $50

>>> Scotts Miracle-Gro (NYSE:SMG) is primarily a lawn and garden care products company, but over the years, through its Hawthorne Gardening subsidiary, SMG has become a major player in the cannabis cultivation space. However, in 2022 and 2023, this $1.7 billion wager has soured.

https://finance.yahoo.com/news/7-struggling-cannabis-stocks-sell-112000258.html

Hawthorne’s weak performance, coupled with other factors, led to overall declines in revenue and profitability. In turn, that drove a sharp drop in the SMG stock price since 2021. Sure, in more recent quarters, fiscal performance has bounced back. This has resulted in a rebound for SMG shares of nearly 18%. Scott Miracle-Gro’s latest earnings beat resulted in shares hitting a new 52-week high on July 31.

However, following this sentiment shift, SMG now trades for around 21.7 times forward earnings. This represents a big valuation premium to other agricultural input companies. For now, bullishness about legalization could sustain SMG’s current share price. If hope and hype fade, though, it may cause the stock to start moving in the wrong direction once again. Downside risk may be more modest here than, with more speculative pot plays. Nevertheless, you may want to stay away.

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Derf, In the microcap realm, one I've had for a while is Climb Global Solutions (CLMB), and a more recent one is M-Tron Industries (MPTI). Nice charts, and the numbers look good, so into my stock collection they went, albeit small positions.

A great microcap has been Winmark (WINA). Its market cap is now over 1 bil though, so it graduated into the Small Cap list (link below). WINA has one of the nicest long term charts you'll ever see. It's been in a sideways consolidation this year but looks ready to resume the upward trajectory. They have retail stores for various types of used merchandise, so a recession resistant business model, and as a store franchisor their expenses are very low, which means phenomenal margins for WINA (48-65%, yowsa).


Small Cap Ideas - https://investorshub.advfn.com/Small-Cap-Ideas-28749




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Derf, Yes, it looks like LUNR does have considerable insider selling, especially recently when the stock reached 6. I see the company did its IPO in Feb 2023 via a SPAC.

This is one reason why I don't have too many microcaps, lol. A lot to analyze, but not much of a track record for these young companies, and I'm definitely not a stock picking wiz like Buffet. He said he reads approx 500 pages of info per day, mostly poring over company's financial statements, etc, and then of course, he's Warren Buffett.

>> HYLN <<

I remember you mentioned them a while back and I started following them loosely. The technology looks really interesting. They pivoted away from the mobile side and are going more for the stationary power market, which seemed like a good move. They recently received a govt contract for the Navy (below) which sounds interesting. Their generators can run on almost any type of fuel, which is pretty amazing. I have them in my Microcap Ideas list (link below). The chart is looking interesting as a bottom / turnaround play. It's formed a quasi inverse head + shoulders bottom, and is nearing the approx neckline breakout level ~ 2.50. This might be one to add to my turnaround stock list.


>>> Hyliion Awarded Government Contract to Create a Megawatt-Scale Concept of the KARNO Generator Technology for the United States Navy


Business Wire

Aug 8, 2024


https://finance.yahoo.com/news/hyliion-awarded-government-contract-create-123000371.html

<<<


Full Article - https://investorshub.advfn.com/boards/read_msg.aspx?message_id=174983711


Microcap Ideas - https://investorshub.advfn.com/Micro-Cap-Ideas-28748



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LUNR does look a bit interesting, but I'm wondering why so many insiders are dumping shares.
My one "penny stock" I own due to the CEO being a fraternity brother only, which is $HYLN. I drove down to Austin one day to meet and let him pitch me. Interesting story, although he's either on the forefront, or blowing smoke on sustainable electric power. The thing I do like about him is his willingness to recognize when he's going the wrong way and adjusting.

Derf, >> PHO <<

Yes, I have some PHO and FIW to cover the broad water sector, plus several individual water related water stocks - BMI, FELE, ROP, WTS. The water sector seems like a good conservative buy / hold area.

Having over 200 individual stocks doesn't take that much time since they are almost all long term buy / holds, and have great long term charts. So just buy and forget. I've been trying to get a better feel for some of the newer ones, but they aren't trading stocks, so not much effort required.

The fun ones like turnarounds take more research. I don't have many microcaps, but here's one that I had on the radar and picked up a few shares this morning at the open -- Intuitive Machines (LUNR). It's relatively tiny, and aerospace is a risky sector, but it looks like they could have a bright future, and have been getting a steady stream of NASA contracts, which shows they are 'well connected'. My dad was in aerospace as an engineer and project manager, and it's an interesting area to follow. Risky to invest in the small companies though, so only a $340 position in LUNR -


>>> Intuitive Machines Stock Soars on New NASA Contract. This Is Big.

Barron's

by Al Root

Sept 17, 2024

https://www.barrons.com/articles/intuitive-machines-stock-price-nasa-34824402?siteid=yhoof2

<<<


Full article - https://investorshub.advfn.com/boards/read_msg.aspx?message_id=175106420


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BTW, if you want water....one of the stocks/ETFs I bought a couple years ago and forgot I owned was $PHO. Looks like I'm up about 50% in it.

If I had as many stocks as you, it would cut into my golfing time. As it is, I lose track of all my investments, which sometimes works out well. Can't tell ya how often I totally forget I own something then is spikes up and I'm pleasantly surprised. In fact, over the last couple of years, if I had just left everything alone I'd probably be up more than I am. I keep finding that selling is a mistake.
On the other hand, in spite of my concerns, I probably hold less cash than I ever have. I need to free up some cash as we've been discussing a river cruise around Europe.

Derf, Gladstone has farms in 15 states, so not everything is in California. Having all that banked water in California ($1.5 billion) could turn out be an 'ace in the hole', considering the frequent droughts out there.

I know what you mean though, and previously had decided to not get back into Gladstone. But the chart setup suggests the bottom is in, so as a 'turnaround' I figure what the heck. Plus it's only 20 shares :o)

These turnaround stocks are the only real risky areas in my portfolio, and currently only 11 of them (out of 216 stocks). It's mostly just to keep things interesting, and to practice the ability to accurately identify chart bottoms. I also have 1 small biotech, but only a $342 investment, so won't lose too much sleep there if it doesn't work out.

Btw. your pick LNC is up nice, and has cleared the 50 MA, so a good sign. I'm still not crazy about the chart, but if it can clear 35 then the 2023-24 uptrend is re-confirmed. First needs to get above 32 and 33 resistance. I thought the chart looked like it was rolling over, so seems risky, especially since the longer term chart is so horrendous. But I don't know anything about the company's fundamentals. The recent revenue growth is 56%, and earnings growth was 75%, so that part looks great.




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I like the idea of $LAND, but they continually lose money. They raise the dividend annually, but not enough to matter. Looks like they spiked due to Covid.
I'd say its trading now around its fair market value.
I have a couple fraternity brothers in California, and owning land there is a nightmare they tell me. Spot one endangered moth and the land becomes useless.

Derf, Btw, speaking of REITS, I recently got back into the farmland REIT Gladstone Land (LAND) as a turnaround. I had some during the big run up several years ago, but luckily took profits before the big plunge. Now it looks like it could be ready to recover.

In addition to 112,000 acrea of farmland (168 farms), they own 49,000 acre-feet of banked water in California worth approximately $1.5 billion, so not bad for a market cap a little over $500 mil. Most of their 168 farms grow produce, which is more profitable than row crops -


https://investorshub.advfn.com/boards/read_msg.aspx?message_id=175093420



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Derf, Thanks. That sounds like a great approach, investing with a friend who is experienced in real estate investing and management. Warehouses have been one of the better REIT subsectors, and as you said, they have many advantages over residential and office space.

In the early 1990s I looked into buying an office building with 6 suites, which would have been a great investment. The tenants were a dentist, an eye doctor, a title company, insurance broker, and several others. I knew hardly anything about managing properties, but planned to move into the dental suite when its lease was up, and the other 5 suites would produce steady income. Seemed like a great idea, but the ADA - 'American with Disabilities Act' had just been passed, so the risk was having to put in ramps, wheelchair accessible bathrooms, etc. So I didn't buy the property, but later it turned out that existing structures were not required to make those changes to comply with the ADA. That building was in a great location and only $365 K, so a big mistake not buying it.

One current idea is to get a condo at the NJ shore, which is only an hour or so away, so that probably makes the most sense. They aren't cheap, but I could get a smaller one. One of my friends from school bought a shore place several years ago and lives there all year.

You mentioned undeveloped land, but that seems like a highly specialized area, with land use restrictions getting stricter all the time. Some people I talked to said that if you have raw land, it's best to develop it now before the laws change. A comparatively safe way to get undeveloped land is as part of a home purchase, say a property on 3, 5, 10 acres. Even then though, the risk is that a portion gets characterized as a protected 'wetland', and then can't be developed, subdivided, etc.

I guess there's always REITS, though as you said, they move with the broader stock market, so not really the most effective diversification tool. I have some (below), but am still underweight the sector. It was flat / down for several years, then had the big bounce before I could get back in, but still own some -


Cavco Industries (CVCO) - Factory built homes (3 Bil)

Cube Smart (CUBE) - Self storage facilities REIT (12 Bil)

D.R. Horton (DHI) - Residential home construction (61 Bil)

Extra Space Storage (EXR) - Self storage facilities REIT (38 Bil)

Gladstone Land (LAND) - Farmland REIT (528 mil)

iShares US Home Construction ETF (ITB) (0.4%)

NVR Inc (NVR) - Residential home construction (28 Bil)

SPDR Real Estate Select ETF (XLRE) (0.10%)

STAG Industrial (STAG) - Industrial properties REIT (8 Bil)

Lamar Advertising (LAMR) - Roadside advertising billboards REIT (13 Bil)

PulteGroup (PHM) - Residential home construction (27 Bil)


Real Estate Sector -

https://investorshub.advfn.com/Real-Estate-Sector-Ideas-25809



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I had to go back and see if I still owned it. (still don't know how you keep track of all your stocks).....
If I remember correctly, when I bought $SMG, I had determined they definitely had a season to own it based on history and a time to be out. Looks like I sold it in July for a 2.32% loss. I did get a couple dividends out of it, so subtract those from the loss.
They were starting to lose money and I'm never a fan of owning stocks with negative earnings.
I see, if I had held it, I'd be profitable now, but I'm hoping I moved that money to something that has made more.
Looks like it tends to bottom in October, so maybe worth it to you, but not to me.

Good post and questions.
OK, so since real estate is out of my realm of expertise, I've got a buddy who, it seems, every thing he touches turns to gold. He has owned houses, strip shopping centers, and now garages and warehouses. He has told me, he will never do residential again due to the constant calls from renters about broken and leaking this and that. He also explained its almost as bad with the offices he rents.
So, it's small garages and small warehouses. Nothing to break and all or any expenses are theirs to deal with. They never seem to miss their rent and insurance is reasonably cheap. I told him I'd go in on whatever he wanted, (I wanted to rent my golf instructor indoor space, but he vetoed that).
He told me to give him $1.5 million and I did. Now I'm a silent partner so not the one to ask about particulars.
If you're looking for a REIT, I know there's $NNN. $O would be another. $ADC and $WPC as well. I don't any of these, but you can check them out. Problem is, it's still stock market and not really real estate....however, it's also liquid. Let me know if you discover any good ones.
Moving along, if you're a believer that one day there will be an economic apocalypse, then land is the answer. Probably further away from the city the better. Plenty of that in Texas, not so sure for you in PA.
Problem there is, you need to keep it insured and it produces no revenue (unless you're like us in Texas with oil and gas rights)...not to mention many here use it to for deer leases.
When I first started buying real estate, I requested oil and mineral rights. The realtors all thought I was crazy, but I figured, "hey, this is Texas, who knows?" Every place was happy to include it in the contract. Weird thing is, I've sold the properties, and now they are doing this fracking gas drilling and finding all sorts of pockets around us, and oddly, I still own the mineral rights! I get surprise checks regularly and every 2 years they have to pay me a large chunk. Talk about happy accidents!

Anyway, long answer to your question, but I have one more.....
We were in Philly last year fr a ball game, and wanted to find the best Philly cheesesteak (so far the best I had found was in Eureka, CA)....anyway, I did a poll online and everyone had a different opinion. I mean how can there not be one accepted best?? We ended up going to Delassandros, which turned out to be great! Not a fan of cheese whiz and I went to Pat's the last time in Philly and was unimpressed.....
So, you're favorite is...........?

Derf, Just curious if you are still long Scotts Miracle-Gro? I remember you mentioned it back in late Feb, and chart-wise it looks like the bottom is likely in. I had some a few years back in 2020 when it was zooming, but just recently got back in with a small position as a turnaround.

While SMG has the big cannabis angle to it via its Hawthorne unit, it also has the original lawn care business, so has some diversity. While net income is still negative (per Yahoo Finance), and the debt level is on the high side (2.8 bil) compared to the current 4 bil market cap, the cash flow is positive by over 1 bil, and the PEG is only 0.4. The short position is still high, 13.6% of the float, but revenues were 3.5 bil, up 8%. But this data is from Yahoo Finance, so it might be slightly dated.

Anyway, the chart is what got me re-interested in the stock. It formed a quasi- ascending triangle over the last 2 years, and has put in a series of higher lows. So I figure it might finally be time for a long position as a turnaround, though could take patience due to the cannabis connection. The relatively high debt / mkt cap ratio will improve quickly once the stock moves higher.

In the very near term it left a bearish candlestick today, so might need a near term pullback. But after that the upside target should be 76 and then 80, which is the key resistance area of the ascending triangle. Once through that the Wall Street traders should take notice, and the 13% short position could start covering. Should be interesting.




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Derf, >> triple net <<

Just curious if you are owning commercial properties, or residential, and is it directly or via pooled private equity, a REIT, etc? Thanks.

Like you, I'm not much into the maintenance and hassles of owning real estate, but I realize that as a 'hard asset', these properties will be one of the safer places to be when / if the US dollar gets into big trouble (ie 'Debt Bomb'). Around here (Phila suburbs), residential real estate is up around 50% in just a few years, which really means that the value of the US dollar has dropped tremendously in purchasing power. While inflation has cooled for now, what happens as the $35 trillion US debt continues on its rapid path to $45 and then $50 trillion? I'm thinking that real estate might be one of the only ways to maintain one's wealth.

Bonds certainly won't. Buffett said that bonds "are among the most dangerous of assets", and that "bonds should come with a warning label". He also noted that - “Over the past century these instruments (bonds) have destroyed the purchasing power of investors in many countries, even as these holders continued to receive timely payments of interest and principal.”

Anyway, just curious to get your take on the best ways to add real estate to one's holdings. Thanks :o)



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I'd go to the dentist far more if she was working on me!
I told the dentist my issue last time, and he just kinda ignored it. He's a golf buddy, so I guess I need to reiterate my pain.
Probably the gums as I have some receding. I'd trade ya stock advice for dental work.
BTW, how is there not painless dentistry by now?

Derf, Btw, with your molar and sensitivity to cold -

First, did the cold sensitivity start all at once, or was it more gradual? If all at once, the cause is often a cracked filling, which is usually easy to see by the dentist. But if the filling looks fine, then the cause is likely a crack / fracture line in the tooth itself. These are pretty common, but not always visible since it will be under an existing filling, and since the fracture line is usually perpendicular to the x-ray beam, it will not be visible on an x-ray. The only way to know for sure is to remove the existing filling, and look for the fracture line.

Shallow fracture lines are not uncommon, but if they get deeper the cold sensitivity increases, and if the fracture gets too close to the tooth's pulp chamber, the pulp can become inflamed (and the cold sensitivity ends, but sensitivity to heat begins). Eventually the pulp can degenerate, and the throbbing begins, and then it's root canal time. But a fracture line can remain stable for years, and sensitivity resolves as the tooth creates a layer of 'reparative dentin' that protects the pulp.

Another common cause of cold sensitivity occurs after the gums recede with age, which exposes the root surfaces (which lack protective enamel). Then with abrasion / wear from toothbrushing, cold sensitivity occurs. This is easy to determine by the dentist, so in your case it sounds like a fracture line is more likely.

There are numerous de-sensitizing toothpastes on the market, so that should help. If your symptoms morph into heat sensitivity, that would be a bad sign, indicating the fracture line has deepened and the pulp of the tooth is becoming inflamed, so the dreaded root canal is looming. Then a crown, and a large dental bill that will help the dentist make the payments on his new beach house, lol. But hopefully they will have a friendly assistant :o)

(As you can tell, I have WAY too much free time on my hands..)






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I agree with you for all the same reasons, but figured since you quote him often......it's very tough to mirror what he does considering it doesn't get reported for a while. He really has a very unfair advantage

Derf, Good point about the estate tax exemption reverting back to the pre-Trump level. More and more people will be affected, after the big inflationary surge in home prices, etc. My dad passed away in 2020, and his estate was under the limit, but a sizable number of families will lose a bundle if the exemption reverts back to the previous amount -

>>> on January 1, 2026, the exemption is scheduled to automatically reset (or sunset) to $5,000,000, indexed to inflation (approximately $7,000,000), unless Congress acts prior to then. <<<



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Derf, >> BRK <<

I own some of the same stocks found in Berkshire, but don't actually own BRK itself. I always figured Buffett wouldn't be around too much longer, but here he is at 94 and still at it. I don't have as much confidence in the new guys yet (Weschler, Combs), and also wonder about potential tax problems there might be for Berkshire shareholders after Buffett is gone (?) There's also the possibility that as a conglomerate, Berkshire is broken up after Buffett is out of the picture. The conglomerate structure has worked well for Buffett, especially since the insurance side provides lots of 'float' cash to invest, but conglomerates can be unwieldy and are viewed as worth more when broken up.

Another reason I haven't owned BRK is that I don't understand the attraction of some of the holdings. The 'Oracle' obviously knows what he's doing, but some of the holdings aren't 'steady' enough looking (chart-wise). Owning a select group of his stocks, as I do, also has risks since he periodically trims positions or sells them outright, which can tank the stock when the stock sale is announced later. I decided to hold on to numerous of these anyway, even after he sells, since the long term chart is so great (AON, MMC, MCO, COST).



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The way I'm reading the new unrealized gains tax, sounds a lot like what Florida tried with their intangible tax, but that was repealed.
Of course the larger fear is on the Estate Tax, which will sunset in 2025. If Dems in office, I have a great fear this will be vastly reduced. I remember when it was $600k. It's currently $13.61 million.

Derf, >> taxable account will get a stepped up cost basis <<

Let's hope that doesn't change anytime soon. They are already talking about taxing unrealized capital gains for the 'wealthy', and the way the US 'debt bomb' is going ($35 trillion and climbing fast), the trend could be toward confiscatory taxation of estates. Luckily the politicians don't want their own assets taxed, so that should slow down the process.

Fwiw, I'm figuring that when the US debt approaches $50 trillion, something is likely to 'break'. Probably a crisis in the US dollar, as other countries shift into alternatives, like gold and the new gold-linked BRICS currency. So the incentive for us investors will be to gradually transition into more hard assets, and fewer bonds.



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I'm curious, do you own BRK? If not, why?

Darn, I was hoping for the stripper.
In reality, what you are doing is fine. You want to be hands on and it gives you as you said, "a hobby". My dad used to sit around all day watching CNBC to root his stocks on. He'd never sell, but he seemed to get enjoyment by watching them scroll across the screen.
Sorry to hear about the losses, but it sounds like, (unlike 98% of the mullets here), you learned from your mistakes. And that's good!
Actually, I've never ever been a fan of real estate. It's not very liquid and the expenses are high. However, when crazy inflation hit recently, it made sense to buy tangible goods for cash. But I think triple net is the only way to go. I don't want someone calling me to repair stuff.
Now, a question for you....I've got this molar in back that the cold just kills, but my dentist can't seem to locate the issue....what do you suggest?

Derf, >> INTC <<

That could be an interesting contrarian long term turnaround play, or a shorter term oversold bounce play. I don't know a lot about the sector, but Intel has obviously missed the boat in a big way to produce such a collapse in the stock. For 'deep' turnarounds I figure you need to know the sector pretty well (work in that field, etc). The other approach is to go with a stock that has only dropped moderately, and thus has a high % chance of resuming its winning ways.

I remember Buffett was asked about turnarounds, and he said the problem is they almost never turn around. So I've been sticking more to relative 'contrarian value', and then only with small investments.

For exposure to the semiconductor sector, I've been using the 'usual suspects' --

Semiconductors -


iShares Semiconductor ETF (SOXX) - (0.35%)

Analog Devices (ADI) - Data converter products, semicond (90 Bil)

Broadcom (AVGO) - Semiconductor devices (508 Bil)

KLA Corp (KLAC) - Solutions for semiconductor and electronics industries (76 Bil)

Monolithic Power Systems (MPWR) Semiconductor + electronics solns (29 Bil)

Nvidia (NVDA) - Graphics processing semiconductors (1.8 Tril)

Onto Innovation (ONTO) - Optical tech for semicond + advanced packaging devices (9 Bil)


https://investorshub.advfn.com/Elite-Stocks-38031


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Derf, >> 20 year old stripper in Taiwan <<

Bingo, how did you guess? :o) But no, actually a 69 year old retired DDS / DMD. In the early days I bungled my investment results by being too aggressive and cavalier (biotech, etc), but then got serious and spent a year learning TA / Charts at the Stockcharts.com 'chart school', and eventually developed the current strategy, which so far has been working well. Stocks are 30% of the portfolio, so fairly low, but seems about right for retirement.

The tax side / capital gains hasn't been a problem yet since I still have some loss carryforwards from the 'bad old days'. Hence the tendency has been to take profits quickly. But buy / hold is where the real growth and profits are, so the challenge has been finding a way to 'stay the course'.

It sounds like you have a wide variety of investments. You mentioned triple net real estate, and having exposure to hard assets seems like a great idea. I currently only have a condo, which is great in retirement, but with inflation and the growing US 'debt bomb', it seems wise to get more exposure to hard asset inflation hedges.




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A 10-15 year chart is a loooong time. I'll give you credit for patience. However, if a stock isn't paying a dividend and you are just buying and holding, how does it ever end??
I used to use Woolworth's as a great example of a stock that was either great or terrible, depending on when you bought. Currently, $TPL is that stock. I guess right now, if you held long term you'd be ok, but had you been buying and selling at the right time, it could be one of your greatest stocks ever. (I guess the same could be said for SMCI right now).
It seems to me you are just saying you buy a stock, keep it....then buy another stock and keep it....I guess if you have unlimited money come in, you can do this, but again I'd ask....is this just to pass on to someone else when you're gone? In this case, forget the ROTH. A taxable account will get a stepped up cost basis.

Derf, On the fundamental analysis side, while us I-Hubbers have limited abilities compared to a Buffett or a professional money manager, I always do a cursory examination of the company's 'numbers', using data from Yahoo Finance. This only takes a few minutes, and includes -

Market Cap
PE
PEG
Margins
ROA / ROE
Cash / Debt
Dividend
Payout %
Shorts
Cash Flow
Revenue
Rev Growth
Net Income
Earnings Growth

Any clunkers that stand out (high debt, negative margins, shorts, etc) are noted, and too many red flags will nix the idea of owning the stock. But some sectors tend to have screwy looking numbers (finance, REITS), so these can be disregarded in the analysis. For example, REITS sometimes have a payout ratio over 100%, finance stocks often have screwy looking numbers, some industries (distributors) tend to have low margins, but high revenues, capital intensive industries can have higher debt, etc.

But for me, the trajectory and steadiness of the 10-15 year is the most important criteria for a long term buy/hold stock, assuming the 'numbers' look OK. Usually if the numbers are bad, then the chart will also not be great, which makes sense. A nice 10-15 chart is the fastest way to judge the nature of the company's business (growth or cyclical), quality of management, steadiness of earnings, etc. Some of these great companies have high valuations though (Cintas, Costco), too high for Buffett's valuation criteria, but I keep some of them in the portfolio even after Buffett has reduced his stake.




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Also, I must mention, unless you are doing all your trading in a ROTH, you must be creating some sort of tax nightmare for your accountant.

BTW, I'd disagree with this statement below....

I guess.
I don't know anything about you, other than you seem to enjoy researching and following stocks.
You may be a 20 year old stripper in Taiwan, or you may be an 85 year old real estate mogul in Atlanta. So, it is beyond me to try to guess your ultimate goal. I just think, for most people, you are making it too tough, just to get average returns.
You could just as easily buy mutual funds since you are buying S&P 500 stocks, THEN buying the S&P 500. If it were me, at the very least I'd be looking into the equal weighted S&P ($RSP).
You didn't mention your annual returns, but I would be curious as to whether your strategy is working. If you are gaining huge returns, what you are doing is a hobby.
Are you seeking growth? Are you looking to leave a legacy for others? Does income matter to you? Obviously you are not risk averse, but do you also buy fixed income? Does diversification to you just mean many sectors?
Personally, I own stocks, mutual funds, muni bonds, variable annuities...and a bit of real estate of which I lack the knowledge to handle properly. Currently I'm seeking out triple net properties.

Derf, >> going to see mutual fund like returns <<

Yes, that's true. Having 200 stocks likely means returns will be similar to the S+P 500. But having so many stocks makes it almost impossible to sell everything at the first sign of trouble, which has always been my problem (nervous nellie). Bailing out after the profits start to build up is another problem that this approach solves. So to 'stay the course', I made it too cumbersome to sell.

So having 200 stocks is mainly a psychological tactic, but only for 1/2 of the stock allocation. The other 1/2 is in the S+P 500, which can be sold off easily if needed, or adjusted depending upon market conditions. So there is a nice balance, which so far has been working.

Another reason to have 200 stocks is the 'collecting' aspect. Some people have been bitten by the 'collecting bug' (coins, stamps, records, etc), so stocks are just one more category to collect. Another reason to have so many stocks is that there are so many great long term stocks out there. My main screening tool is the trajectory and steadiness of the 10-15 year chart, and there are dozens and dozens of stocks that qualify. Add in 10 or so turnarounds, and voila, you soon have 215 stocks. It's also a fun and interesting hobby if you are retired with too much free time. But whatever works. Every investor is different.



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Derf, >> ULTA <<

As a turnaround candidate, I had initially rejected it since the chart had broken key support. But then the news came that Berkshire had taken a position in ULTA (most likely Weschler, not Buffett), so I decided to get a small position. Sure enough, the 'Berkshire effect' kicked in, and the stock is now back above that broken support level. So far so good, ULTA also has a pretty nice long term chart, which is a plus since it raises the odds of a return to the long term uptrend.

As for the fundamental analysis of the company's numbers and business prospects, I'll defer to Berkshire / Weschler's superior knowledge. Also, articles I've read on the company make it sound like the company's setbacks are temporary. So I figure what the heck, a small position makes sense.



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