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TIDE...High volume and in a great position for a breakout of this basing. Let's hope this is it.:)
TIDE...High volume and in a great position for a breakout of this basing. Let's hope this is it.:)
Hi Zab,
One of my mutual funds I have I don't even bother looking at most of the time. I figure it's long-term. I just looked at it. Yikes! The shares that were $50 or so around a year ago are now 22.48.
Regarding your friend, if he was holding mutual funds and/or decent stocks, sounds like he very well could have sold at the wrong time; however, it's hard to hold on when you see your money going down each day. I was listening to someone on TV and they were saying it looks like a V bottom and that when the market bottoms it should shoot up. According to him the sectors that were hit the hardest would be the leaders of the move up.
Anyway, after today think I'll just ride this out and put my focus elsewhere other than watching tick by tick.
Good luck,
Lexi
You are welcome. Wow, what a day today. Yikes!! :) Picked up a small amount of AIG figuring with all that bailout money it should move up some when the time is right. Also bought a small amount of RAD. While they're having their problems financially like most, they bought a bunch of Eckerd stores and warehouses. So they do have assets and the price hit .50 today. Last shares I bought were .65 or so.
Lexi
Was listening to a quality investor yesterday on TV saying that the market is in a V shape and that it doesn't look like the bottom is that far away. He said that in Vs when the move up comes it is very fast. Now...for the part that relates to BQI...
He said that the leaders when the V turns are those that are the beaten down ones towards the bottom, so a few he mentioned to be in for the move up are financials, energy, and materials.
Not posting much for have pretty much gone into my bunker.:) I still have shares of BQI I'm holding, but instead of adding I'm trying to diversify in my holdings. When the time is right I'll add to my shares.
Lexi
Morningstar.com
The Market's Most Undervalued Stocks
Wednesday October 8, 7:00 am ET
By Matthew Coffina
Every month, we publish an article about the market's most overvalued stocks. Since in normal times investors tend to have a bullish tilt, this is usually an exercise in contrarianism. However, these times are far from normal. We think investors have more than enough to be pessimistic about already, so this month, we're changing this article to "the market's most undervalued stocks."
With the market crashing and fear at a pinnacle, we see no shortage of bargain opportunities. Changing the theme of this article to undervalued stocks has practical implications. Our star rating system is inherently contrarian: As prices fall, stocks become cheaper relative to our fair value estimates. As of market open on Monday, October 6, we had a 1-star rating on only 35 companies. In contrast, 511 companies carried our 5-star rating. Value investors should be jumping for joy.
With discount rates and risk premiums rising across the board, now could be a good time for the strongest-stomached investors to increase their risk exposure--the market is terrified of risk, so taking on risk should be increasingly well-compensated over the long run. However, market turmoil can also be a great time to pick up core holdings at a discount. The market can be indiscriminate in marking down stock prices, throwing the good out with the bad.
Some of the best investments can be made by buying best-of-breed companies during periods of general market turmoil and holding them until the market comes to its senses. Below, we highlight five companies that passed the following screen:
1. Morningstar Rating of 5 stars
2. Trading at less than half our fair value estimate
3. Morningstar economic moat rating of at least narrow
4. Stock down 20% or more year to date
5. Fair value uncertainty of low or medium
6. Debt-to-total-capitalization of less than 50%
We like these companies for the long-haul, and now looks like a great time to buy. Not surprisingly, Warren Buffett's Berkshire Hathaway (brk.b.B) agrees with us on the first three, as they were recently in Berkshire's portfolio.
USG CorporationPrice/Fair Value = 0.42
From the Analyst Report: Even with the strength of USG's (NYSE:USG - News) brands and distribution, the business remains highly cyclical, with revenue closely tied to booms and busts in commercial, industrial, or residential construction. USG is able to obtain price premiums on its wallboard during hot periods, and it scales back prices at a lower rate than its competitors when building slows. At the peak of the building cycle, USG's price for wallboard was 7% higher than that for a similar product from Eagle Materials, and that premium has now increased to 10%. Although this price volatility leads to choppiness in short-term results, return on invested capital over the long run has averaged 15%--well in excess of the company's cost of capital.
UnitedHealth GroupPrice/Fair Value = 0.45
From the Analyst Report: UnitedHealth (NYSE:UNH - News) connects its 70 million U.S. customers to a network of health-care providers that includes 560,000 physicians and 4,800 hospitals nationwide. The firm reaps the benefits of the positive feedback loop that results when customers seek out UnitedHealth for access to so many care providers and when providers join the UnitedHealth network for access to all those customers. UnitedHealth has one of the strongest bargaining positions in the industry.
ConocoPhillips
Price/Fair Value = 0.48
From the Analyst Report: Conoco's (NYSE:COP - News) production and exploration business benefits from OPEC's ability to influence global supply and stabilize pricing. Ownership of an extensive natural-gas pipeline, gathering systems, and facilities to unlock stranded natural-gas resources also contributes to the company's economic moat.
News Corporation
Price/Fair Value = 0.49
From the Analyst Report: News Corp.'s (NYSE:NWS - News) largest business segment, Fox Entertainment Group, owns a vast library of motion pictures and television shows including The Sound of Music, Star Wars, Titanic, The X-Files, and The Simpsons. Besides the proven ability to create great content, News Corp. can also distribute its content around the world through its theatrical film-distribution capabilities, television networks, and satellite television providers. News Corp. also owns one of the premier online distribution channels via its purchase of MySpace in 2005.
Expedia
Price/Fair Value = 0.41
From the Analyst Report: Expedia (NasdaqGS:EXPE - News) has separated itself from the pack, however. It is almost twice as big as its closest competitor, with nearly 35% of the U.S. online travel agency, or OTA, market. The company uses its size to negotiate lower wholesale prices from suppliers, and, because Expedia is the largest OTA, more suppliers are likely to distribute through the firm. The lower costs lead to higher margins than competitors, and the diverse inventory attracts even more customers to Expedia's sites, leading to favorable network economics and an uphill battle for competing OTAs.
Note: The stocks mentioned above passed our screen as of October 6. The results of the screen may change because of daily price fluctuations or other factors.
Morningstar.com
The Market's Most Undervalued Stocks
Wednesday October 8, 7:00 am ET
By Matthew Coffina
Every month, we publish an article about the market's most overvalued stocks. Since in normal times investors tend to have a bullish tilt, this is usually an exercise in contrarianism. However, these times are far from normal. We think investors have more than enough to be pessimistic about already, so this month, we're changing this article to "the market's most undervalued stocks."
With the market crashing and fear at a pinnacle, we see no shortage of bargain opportunities. Changing the theme of this article to undervalued stocks has practical implications. Our star rating system is inherently contrarian: As prices fall, stocks become cheaper relative to our fair value estimates. As of market open on Monday, October 6, we had a 1-star rating on only 35 companies. In contrast, 511 companies carried our 5-star rating. Value investors should be jumping for joy.
With discount rates and risk premiums rising across the board, now could be a good time for the strongest-stomached investors to increase their risk exposure--the market is terrified of risk, so taking on risk should be increasingly well-compensated over the long run. However, market turmoil can also be a great time to pick up core holdings at a discount. The market can be indiscriminate in marking down stock prices, throwing the good out with the bad.
Some of the best investments can be made by buying best-of-breed companies during periods of general market turmoil and holding them until the market comes to its senses. Below, we highlight five companies that passed the following screen:
1. Morningstar Rating of 5 stars
2. Trading at less than half our fair value estimate
3. Morningstar economic moat rating of at least narrow
4. Stock down 20% or more year to date
5. Fair value uncertainty of low or medium
6. Debt-to-total-capitalization of less than 50%
We like these companies for the long-haul, and now looks like a great time to buy. Not surprisingly, Warren Buffett's Berkshire Hathaway (brk.b.B) agrees with us on the first three, as they were recently in Berkshire's portfolio.
USG CorporationPrice/Fair Value = 0.42
From the Analyst Report: Even with the strength of USG's (NYSE:USG - News) brands and distribution, the business remains highly cyclical, with revenue closely tied to booms and busts in commercial, industrial, or residential construction. USG is able to obtain price premiums on its wallboard during hot periods, and it scales back prices at a lower rate than its competitors when building slows. At the peak of the building cycle, USG's price for wallboard was 7% higher than that for a similar product from Eagle Materials, and that premium has now increased to 10%. Although this price volatility leads to choppiness in short-term results, return on invested capital over the long run has averaged 15%--well in excess of the company's cost of capital.
UnitedHealth GroupPrice/Fair Value = 0.45
From the Analyst Report: UnitedHealth (NYSE:UNH - News) connects its 70 million U.S. customers to a network of health-care providers that includes 560,000 physicians and 4,800 hospitals nationwide. The firm reaps the benefits of the positive feedback loop that results when customers seek out UnitedHealth for access to so many care providers and when providers join the UnitedHealth network for access to all those customers. UnitedHealth has one of the strongest bargaining positions in the industry.
ConocoPhillips
Price/Fair Value = 0.48
From the Analyst Report: Conoco's (NYSE:COP - News) production and exploration business benefits from OPEC's ability to influence global supply and stabilize pricing. Ownership of an extensive natural-gas pipeline, gathering systems, and facilities to unlock stranded natural-gas resources also contributes to the company's economic moat.
News Corporation
Price/Fair Value = 0.49
From the Analyst Report: News Corp.'s (NYSE:NWS - News) largest business segment, Fox Entertainment Group, owns a vast library of motion pictures and television shows including The Sound of Music, Star Wars, Titanic, The X-Files, and The Simpsons. Besides the proven ability to create great content, News Corp. can also distribute its content around the world through its theatrical film-distribution capabilities, television networks, and satellite television providers. News Corp. also owns one of the premier online distribution channels via its purchase of MySpace in 2005.
Expedia
Price/Fair Value = 0.41
From the Analyst Report: Expedia (NasdaqGS:EXPE - News) has separated itself from the pack, however. It is almost twice as big as its closest competitor, with nearly 35% of the U.S. online travel agency, or OTA, market. The company uses its size to negotiate lower wholesale prices from suppliers, and, because Expedia is the largest OTA, more suppliers are likely to distribute through the firm. The lower costs lead to higher margins than competitors, and the diverse inventory attracts even more customers to Expedia's sites, leading to favorable network economics and an uphill battle for competing OTAs.
Note: The stocks mentioned above passed our screen as of October 6. The results of the screen may change because of daily price fluctuations or other factors.
Zab,
Thanks for sharing your thoughts. If you aren't familiar with Bill Cara's site, I think you might like it. He writes market reports each day, gives a list of his picks and gives the times to buy and sell. He knows what he's talking about and I believe anyone that likes to buy quality stocks and hold them for awhile might like him.
I got a partial of GG today. Wow, did that ever drop but then again, what didn't? LOL
Lexi
I have a list of three dozen stocks to consider buying here. Each of these companies has respectable management, financial strength, operating margins, long-term returns on shareholder capital, industry leadership positions, and good products and services. There are problems with some of them, but consider that these same problems were evident during recent times when share prices were much higher. In order of the GICS sectors, here are the 36 companies and ticker symbols (alpha order) that I like:Sector 10: Energy
• ECA EnCana
• IMO Imperial Oil
• SU Suncor Energy
• XOM Exxon MobilSector 15: Basic Materials
• Mostly precious metals at this point [25% invested after the $USD reaches a short-term cycle peak in a couple days as the Euro/Pound sinks due to the credit market crisis that monetary authorities there must stabilize].
• ABX Barrick Gold
• DOW Dow Chemical
• GG Goldcorp Inc
• SLW Silver Wheaton
Sector 20: Industrials and Transports
• ABB ABB Limited
• BA Boeing
• GE General ElectricSector 25: Consumer Discretionary Spending
• None at this point until the credit markets recover
• After an initial rally from an over-sold condition, most of these stocks will likely miss the first leg of the Bull and start to lift say about March 2009Sector 30: Consumer Staples
• DEO Diageo
• KO Coca-cola
• MCD McDonalds
• PG Procter & Gamble
• WAG Walgreens
• WMT Wal-MartSector 35: Consumer Healthcare
• DNA Genentech
• JNJ Johnson & JohnsonSector 40: Financial• Only a few at this point until the credit markets recover
• After an initial rally from an over-sold condition, most of these stocks will likely miss the first leg of the Bull and start to lift say about March 2009
• HBC HSBC Holdings [very strong in the emerging economies]
• IBKR Interactive Brokers [brokers and traders and not dealers]
• OXPS OptionsXpress Holdings [brokers and not dealers]
• RY Royal Bank of Canada [very strong in the emerging economies]Sector 45: Technology
• CSCO Cisco Systems
• DELL Dell Inc
• GOOG Google
• IBM IBM
• INTC Intel Corp
• ORCL Oracle
• QCOM Qualcomm Inc
• RIMM Research In Motion
Sector 50: Telecom
• MICC Millicom International
• NOK Nokia Corp
• TEF Telefonica SASector 55: Utilities
• CCJ Cameco [not a utility technically speaking but supplies uranium]
• EXC Exelon Corp [uranium utility]This list is lengthy but not complete. I can think of many other high quality companies that are trading at attractive prices. I just need to remind you that cycle bottoms happen in periods of fear just like cycle tops happen in periods of greed. You know where the world stands today. I cannot act for you, but I can tell you what I am doing for clients because this is a period of fear, and I have no problem taking action.To repeat what I have been saying through this Bear market ending process; it pays to close your ears and to direct your full attention to prices. Trends and cycles are reversing here. This time in the market is what successful traders wait for. Carpe diem; seize the opportunity. http://www.billcara.com/archives/2008/10/daily_report_for_wed_oct_01_20.html#more
Hi Lucy,
I'm in LEHNQ and I'm trying to understand why it moved up today. I read the things at Yahoo Finance, but really couldn't make much sense of it. If you could give me some insight, I'd appreciate it. Chartwise, once it got in that gap, would think there would be little resistance. It got there and pulled back, but ended the day decently.
Lexi
Thanks...
"As a result of this expected loss..."
With current conditions of high grain etc., I don't think this loss comes as a surprise to most people; however, I do think many probably think the dive was extreme. Regardless, we know this is a fearful market and this kind of thing happens.
Lexi
Thanks for your reply. Quality trader friend who plays these things a lot said it's even possible that they open up from the close of yesterday. We'll see. Think people are just so fearful in this environment; they often bail and ask questions later.
Lexi
PPC...Did I include this in my post here? I posted info on a few BBs here and at SI so I'm not sure if I had this in post too. It might explain some of what you were talking about...
Bloomberg reports that BB&T analyst said "the stock decline is based on concerns they're going to trigger some of their debt covenants, and they may have difficulty getting waivers in this credit environment." Co had $588.4 mln available to borrow from two credit lines as of June 28, according to a filing with the SEC. To avoid violating its credit agreements, the co is required to keep various measures of creditworthiness above set levels. In April, those covenants were adjusted to levels PPC said "it can comply with in the near-term despite the current economic issues facing the chicken industry," according to the July SEC filing.
I do think the move down was excessive. I had this same thing happen to me with ESLR and then what a bounce it had. Nothing major was wrong with ESLR, it was that they had a 2nd offering or something like that with LEH and it looked like those extra shares the company made wasn't going to benefit them. PPC seems to me is suffering from bad economy, higher price of grains, etc..
Lexi
Someone was watching out for you.:) Hopefully it opens in the morning okay. They've already sliced it considerably and took it down to S from years ago. Guess I'll just have to wait and decide what to do when it opens.
Lexi
Does that mean you're ready to buy at the lower price?:)
Poultry company stock takes nosedive
by Jeff Ishee
Sept. 24, 4:02 PM - The largest chicken company in the United States came under intense scrutiny Wednesday as investors witnessed stock prices decline by 38 percent in a single day. Shares of Pilgrim’s Pride Corporation, based in Pittsburg, Texas, opened the day at $10.26 and by 4:00 PM were valued at only $6.36 per share. Thirteen million shares were traded before trading was halted at 3:28 PM ET.
Ray Atkinson, Public Relations Manager for the Pilgrim’s Pride, told “On the Farm Radio” in a late afternoon phone conversation that there was “no news” to cause the dramatic decrease in the company’s stock value.
Online message boards were filled with posts by investors who follow the stock closely. Many theorized how the company’s stock could lose such a substantial amount in a single day. Several investors said short selling by hedge funds could be a reason for the loss, while others speculated about everything from the financial soundness of the company to a possible outbreak of bird flu.
In the past 4 days, Pilgrim’s Pride stock has been reduced from $12.48 per share to $6.36 per share, representing a loss of 49 percent.
In a previous press release from Pilgrim’s Pride, officials blamed high fuel and feed costs for a decline in company profitability.
Farmers around the nation are watching the situation closely. More than 6,000 growers produce birds for the company. Pilgrim’s Pride owns and operates 36 chicken processing plants (33 in the United States and three in Mexico) and 12 prepared-foods plants. Thirty-five feed mills and 48 hatcheries support these plants. Major facilities are located in Virginia, West Virginia, Pennsylvania, Texas, Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, North Carolina, South Carolina, Tennessee, Puerto Rico and Mexico.
Pilgrim’s Pride is the largest chicken producer in the U.S and the second largest in Mexico. The company employs approximately 53,000 people in the U.S. and Mexico.
==================================Bloomberg reports that BB&T analyst said "the stock decline is based on concerns they're going to trigger some of their debt covenants, and they may have difficulty getting waivers in this credit environment." Co had $588.4 mln available to borrow from two credit lines as of June 28, according to a filing with the SEC. To avoid violating its credit agreements, the co is required to keep various measures of creditworthiness above set levels. In April, those covenants were adjusted to levels PPC said "it can comply with in the near-term despite the current economic issues facing the chicken industry," according to the July SEC filing.
Poultry company stock takes nosedive
by Jeff Ishee
Sept. 24, 4:02 PM - The largest chicken company in the United States came under intense scrutiny Wednesday as investors witnessed stock prices decline by 38 percent in a single day. Shares of Pilgrim’s Pride Corporation, based in Pittsburg, Texas, opened the day at $10.26 and by 4:00 PM were valued at only $6.36 per share. Thirteen million shares were traded before trading was halted at 3:28 PM ET.
Ray Atkinson, Public Relations Manager for the Pilgrim’s Pride, told “On the Farm Radio” in a late afternoon phone conversation that there was “no news” to cause the dramatic decrease in the company’s stock value.
Online message boards were filled with posts by investors who follow the stock closely. Many theorized how the company’s stock could lose such a substantial amount in a single day. Several investors said short selling by hedge funds could be a reason for the loss, while others speculated about everything from the financial soundness of the company to a possible outbreak of bird flu.
In the past 4 days, Pilgrim’s Pride stock has been reduced from $12.48 per share to $6.36 per share, representing a loss of 49 percent.
In a previous press release from Pilgrim’s Pride, officials blamed high fuel and feed costs for a decline in company profitability.
Farmers around the nation are watching the situation closely. More than 6,000 growers produce birds for the company. Pilgrim’s Pride owns and operates 36 chicken processing plants (33 in the United States and three in Mexico) and 12 prepared-foods plants. Thirty-five feed mills and 48 hatcheries support these plants. Major facilities are located in Virginia, West Virginia, Pennsylvania, Texas, Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, North Carolina, South Carolina, Tennessee, Puerto Rico and Mexico.
Pilgrim’s Pride is the largest chicken producer in the U.S and the second largest in Mexico. The company employs approximately 53,000 people in the U.S. and Mexico.
==================================Bloomberg reports that BB&T analyst said "the stock decline is based on concerns they're going to trigger some of their debt covenants, and they may have difficulty getting waivers in this credit environment." Co had $588.4 mln available to borrow from two credit lines as of June 28, according to a filing with the SEC. To avoid violating its credit agreements, the co is required to keep various measures of creditworthiness above set levels. In April, those covenants were adjusted to levels PPC said "it can comply with in the near-term despite the current economic issues facing the chicken industry," according to the July SEC filing.
PPC...Might be a good thing. Will give everyone a chance to step back and rethink this. I got three partials of it, adding the last shares around 6.44 or so. I don't have a big amount of shares though.
Ya gotta love those Yahoo message boards...LOL
==================================
****I HOPE THERE'S A BUY-OUT =====by dolphinwaxer
***PPC halted-Company to make positive statement IMO ==by masterofchampionz
====================
It's my hope they halted it for there is no good reason for this tankage. One story says meat companies are all getting hit today due to concerns about getting needed credit.
Lexi
Ya gotta love those Yahoo message boards...LOL
==================================
****I HOPE THERE'S A BUY-OUT =====by dolphinwaxer
***PPC halted-Company to make positive statement IMO ==by masterofchampionz
====================
It's my hope they halted it for there is no good reason for this tankage. One story says meat companies are all getting hit today due to concerns about getting needed credit.
Lexi
PPC...Looks like they halted it.
PPC...Good for you, it's looking better than when I made my first partial.:)
PPC...Yes, glad I didn't sell. Think that LOD was S from years ago. With book value over $15 think this stock is certainly worth this price.
Only bad news I can find is that the had to lay off people and that their current situation affected their profitability. Certainly not bad enough to result in this drop. Book value is over $15
PPC...I'm getting ready to call uncle and sell and take my loss. I only have 200 shares..but that can be a big loss the way it's going.
Yikessssss!! PPC...Is everyone shorting our chickens since they can't short banks? :)
PPC...Unless something is wrong at Yahoo Finance, the BV is above $15 and it's now @ 8.43.
Book Value Per Share (mrq): 15.489
Float: 47.93M
% Held by Insiders1: 47.02%
% Held by Institutions1: 75.80%
===================
I'm in too. Bought a small amount at 9.66 or so and bought the next partial 1 point down.
LOL...PPC...I bought a small amount and plan is to add if it drops 1 point from my entry.
PPC...Chicken on sale! @ 9.55.
Hi Bob,
Thanks for the update. I'm still holding my IRA shares.
Lexi
Great! Thanks for the tip. I went short some EEM @ 39.07 towards EOD only because it has been in such a downtrend and that spike up with the gap I think will retrace at least some. It dipped to 38.40 for the close, so we'll see what happens on Monday. While attempts by government to stabilize the situation, all the problems won't be cured, plus there's lots of ironing out before it's done. Consequently, I think we retrace if not Monday, then very soon. I even got some DIA puts.
Lexi
Think this is worthy of note. It shows where the money flowed in on stock weakness (note buying of CDE) and then click on the tab that shows where money flowed out on strength - meaning they sold the rally.
==========================================
http://online.wsj.com/mdc/public/page/2_3022-mfgppl-moneyflow.html?mod=mdc_leader
Think this is worthy of note. It shows where the money flowed in on stock weakness and then click on the tab that shows where money flowed out on strength - meaning they sold the rally.
==========================================
http://online.wsj.com/mdc/public/page/2_3022-mfgppl-moneyflow.html?mod=mdc_leader
STT...Actually I just jumped in after looking quickly at the chart. Bought small, only 100 shares and within a minute or two was down 200. LOL Decided to give it a chance and held until I was up close to 900, then I put in a trailing stop that was 1.50 points and really should have made it bigger due to it being so wild. Course by the time I got the stop in it had already pulled back some for it was one rocket. My stop went off when I was up 700 or so and then the stock continued moving up at least 9 more points without me.:) BTW, my entry to exit was around 20 minutes. <g>
UYG...Good for you, I sold mine in premarket when it was up before it dropped so badly. I didn't rebuy instead got in STT for the ride of my life. LOL Very nice profit in twenty minutes before my TS hit.:)
Lexi
MGN...Thanks for telling me, put it on my streamer.
Congrats on your buy of UYG. I bought some yesterday @ 17.86 and held overnight. Wasn't sure how smart it was when I bought yesterday, but it's looking much better now with all the talk of intervention, increased liquidity, etc..
Also have a nice position in ABK that I've been trading.
Lexi
By the looks of XLF, UYG, and DIA in AHs, I wouldn't be surprised if your ABK has a nice move up in the morning. Remember with almost 94% institutional owners.... and 32% short...I'd think it could easily run on any good news.
LOL Okay, understand.