This is not time to own semiconductor stocks
February 22, 2010
This is not time to own semiconductor stocks, either chip makers or equipment manufacturers. According to the Semiconductor Industry Association, worldwide sales of semiconductors were $14.2 billion in February, a decline of 30.4% compared to February 2008 sales of $20.3 billion. This is a continuation of the decline observed from the prior year. Sales were down by $1.1 billion from January 2009 levels of $15.3 billion.
The Long and the Short of it All
July 15, 2009
We are presenting a list of companies which we believe are currently mispriced, based on our estimate of fair value, by the market. We develop our fair value ranges by projected free cash flow out one year and estimating an appropriate FCF multiple based on our assessment of risk and the strength of the balance sheet.
Cisco Systems [CSCO: 25.88, -0.09 (-0.35%)] Recent Price $17.04 Value Range 21.86 – $38.41
Cisco Systems, Inc. designs, manufactures and sells Internet protocol (IP)-based networking and other products related to the communications and information technology (IT) industry, and provides services associated with these products and their use. Read more
Natural Resources, Energy and Precious Metals Update
June 24, 2009
Many investors are somewhat dazed and befuddled as they watch what used to be called “The Natural Resources Sector” bounce up and down as the summer season commences. With the dollar up again, commodities including the precious metals and oil were off sharply yesterday. All in all, it was just a broadly negative day. Little was spared, including equities, which also took a serious hit. Even perennial bull James Moore, of TheBullionDesk.com, was forced to write that, “Short-term the metal [gold] could extend lower as a result of the dollar.” John Reade, of UBS in London, concurred, writing that, “We would not be surprised to see further short-term declines, especially in the absence of any material jewelry, physical-investment or ETF demand.” Read more
Reliance Steel & Aluminum Co.: Down But Not Out
June 21, 2009
“Reliance Steel & Aluminum Co. [RS: 47.42, +0.06 (+0.13%)] is one of the largest metals service center companies in the United States. Though a network of more than 200 locations in 38 states, Belgium, Canada, China, Mexico, Singapore, South Korea and the United Kingdom, the Company provides value-added metals processing services and distributes a full line of more than 100,000 metal products. These products include galvanized, hot-rolled and cold-finished steel, stainless steel, aluminum, brass, copper, titanium and alloy steel sold to more than 125,000 customers in a broad range of industries. Some of these metal service centers provide processing services for specialty metals only.” Read more
ASA Limited: A Closed-End Fund Worth More Than Meets the Eye
June 12, 2009
One aspect of my work that I love is interviewing interesting people. On June 4th, 2009 I had the pleasure of speaking with David J. Christensen, the CEO of ASA Limited [ASA: 74.27, +0.57 (+0.77%)], a closed-end, non-diversified investment company registered with the United States Securities and Exchange Commission. The Company was organized in Bermuda and is the successor to a closed-end investment company of the same name organized in the Republic of South Africa in 1958. Read more
Will Ownership of Gold & Silver Wheaton Be Outlawed?
June 4, 2009
Before you ask the inevitable question “Have you lost your mind?” let me reveal the “method of my madness”. There are a growing number of people including some level-headed analysts who have publicly wondered whether it was possible that the private ownership of physical gold might be outlawed in the United States. Many would say that the likelihood of that in the land of democracy and The Constitution is virtually zero. That is what I’d like to believe as well, especially if I were more “historically naive”. But, history does tell us that the US government, in the days of a fixed gold price, did intervene in a very direct manner with President F.D. Roosevelt banning the “hoarding of gold coin, gold bullion, and gold certificates” and thus forcing US citizens to sell to Federal Reserve at $20 an ounce. Subsequently the Fed raised the price of gold to $35 an ounce, and the ownership of gold was literally outlawed up to around 1971. Read more
Stocks For An Economic Recovery – Materials
May 23, 2009
Market fundamentals have deteriorated and Wall Street analysts’ “Sell” recommendations have piled up faster than redemptions at a long/short equity hedge fund. However, this newsletter is all about the rebound. The old saying, “You should be buying when everyone is selling,” has never been more true, and with the steep discounts of major steel producers, U.S. Steel Corp. [X: 61.40, +0.98 (+1.62%)] provides an excellent opportunity to get ahead of the crowd and buy into a sound business for a fraction of its value. Read more
Gold and Silver Defy The Selling Season
May 20, 2009
We’ve passed the midpoint in May and gold closed above $930 on Friday May 15th. This could be hugely significant and should give all prudent investors pause for thought.
Allow me to share with you an email message I sent to my family today that focuses in on my concerns on this topic. Although this will not be a long article, it is intended to motivate us to think “outside the box” as we slide into the “Sell in May and go away” time of the year. Here’s what I wrote my family today:
“Realizing it is only the middle of May, it might be too early to say “it’s going to be different this year”
when it comes to gold and silver. Read more
Time for the “Commodities Contrarian Contango” with Precious Metals and Energy
May 18, 2009
Gold and Silver has had an amazing run since last December, and even more impressive have been the mining shares like Agnico-Eagle [AEM: 58.34, -0.95 (-1.60%)], Goldcorp [GG: 39.30, -0.72 (-1.80%)] and Barrick Gold [ABX: 39.06, -0.12 (-0.31%)].
My favorite mid-size gold miner, IAM Gold [IAG: 14.61, -0.16 (-1.08%)] has virtually quadrupled off its low last November and almost doubled in the past 5 months. It’s been a feverish frenzy, an overdue bubble that might be ready to burst.
On March 8th I tried to provoke the gods of Wall Street to create a huge stock market rally by conjuring up the term “Contrarian Contango” as a new term for paradoxically pretending you think the markets are going to keep going down when you sense they are about to go up. It worked beyond my expectations. Read more
Best Stocks of 2009 Review: The First Third
May 10, 2009
More than a third of the year has passed and the markets have rebounded nicely from their lows to turn a small profit on the year. It seems that the worst may be behind us when it comes to equity prices as many stocks have rallied more than 50% this year alone. Here at Bullish Bankers, we published a “Best Stocks of 2009″ newsletter at the beginning of the year, and our equities have performed very admirably when compared to our benchmark, the S&P 500. This article is designed to give a recap of how our equities have performed and give some additional explanation to our initial stock picking process. Through Friday, May 8th, our BB2009 Index has outperformed the S&P 500 by 11.51% on a geometric basis ex-dividend payments. Beside each of the sectors I have listed our three picks and the comparable ETF to show our relative performance on a sector by sector basis. Read more
