mrmarket
12-16-2008, 05:02 PM
It’s time to go Christmas shopping and boy did I find two great stocks that are on sale. Since there isn’t any momentum in the overall market, I felt that I could be a little more successful picking stocks that are oversold. So far it has worked out pretty well. I have been concentrating on stocks that have sold off more than 40% from their highs while still maintaining impressive revenue and earnings growth while carrying zero debt. I am not Bernard Madoff. He can’t bench press 385 lbs. If he ripped me off, I would snap his neck like a chicken. He is not HUGE.
The first stock I bought is HURC – Hurco Companies.
• HURC stock price is down over 62% so far in the last 52 weeks (it’s traded as high as 52.12) and was oversold by 30% relative to overall market (so it’s on sale).
• HURC has a P/E value of 4.0.
• HURC has cash on the books of $5/share. So the entire business is being valued at only a little more than $8/share.
• HURC has zero debt.
• Profit margin is 10%
• Operating margin is 16%
• ROA is 13%
• ROE is 20%
• EPS growth is 7.4%
• Revenue growth is 19%
• Book value is $19/share…HURC is trading at a big discount to book value!
Hurco Companies, Inc., an industrial technology company, designs, manufactures, and sells computerized machine tools and integrated computer control systems and software products to companies in the metal working industry worldwide. Its products include general purpose computerized machine tools, which primarily include vertical machining centers and turning centers for the metal cutting industry. The company also produces computer control systems and related software for press brake applications that are sold as retrofit control systems. In addition, Hurco Companies produces and distributes software options, control upgrades, hardware accessories, and replacement parts for its machine tool product lines, as well as provides operator training and support services to its customers.
HURC’s market cap is only $89,000,000. So it is a likely takeover candidate if its stock price doesn’t go up soon (especially with all the cash on its books). There isn’t much not to like about Hurco other than the fact that it doesn’t pay a dividend.
I bought HURC today at 13.94. I will sell it in 4-6 weeks at $16.18. Don’t believe me? Here’s what the boss had to say:
Michael Doar, Chief Executive Officer, stated, ``We are pleased that, even with the sudden sharp decline in sales during the fourth quarter, our results for fiscal 2008 set another record for Hurco, with revenues growing 19% to $223,994,000 and earnings growing 8% to $22,520,000 compared to the prior year. We significantly expanded our product line in 2008 with the introduction of 14 new models at IMTS in September. We believe that these products will allow us to gain a larger share of the machine tool market and extend our customer base when global economic conditions begin to improve.
There is no question that we are significantly impacted by the worsening global economic crisis, as evidenced by the 27% decline in global orders during the fourth quarter. However, we believe that we are well positioned to weather the downturn due to our broad product line and strong financial position. At the end of the year we had cash, cash equivalents and investments of $33,068,000 and no outstanding debt. In addition, we have already taken steps to reduce expenses and inventory levels to reflect lower demand. Our customers are facing significant challenges as the financial crisis has spread to the manufacturing sector. We will continue to focus on the three key areas that have been our emphasis since 2001: customers, profitability and core competencies, which include software automation, efficient manufacturing and global sales distribution.``
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The second stock I bought is an all time favorite high tech stock that continues to make products that everyone wants, and as a result, continues to be very profitable. However in the Wall Street sell off, it’s stock price got unfairly hammered.
If you can imagine a computer accessory, Logitech probably makes it. With more than 200 products on store shelves all around the world, Logitech rides countless technology trends.
Examples include the rise of online video. Logitech holds a huge lead in Web cam sales. Then there's Internet phone service. Logitech sells the equipment. Or the increasingly common use of the computer to play music, for which Logitech provides speakers. And the popularity of fancy keyboards and mice, where wireless and ergonomic versions are top sellers. Don't forget video game controllers, another Logitech specialty. Or a relatively new offering: Universal remote controls to coordinate the increasingly complex technology in living rooms.
Logitech has been increasing sales, profit margins and earnings at a rapid pace. The reason, ANALysts say, is healthy demand for its new products, which sell for higher prices. Their market cap is over $2 billion dollars. They aren’t going anywhere…and they just shipped their billionth mouse.
Today I bought LOGI at 13.44. I will sell it in 4 – 6 weeks at 15.60. Logitech is a great company that makes great products, but the real reason I bought it is because it is cheap.
LOGI’s stock price is down 57% over the last 52 weeks and 41% over the last 3 months. Remember, this is a high tech company, yet its PE is trading at only 8.25. It’s 5 year average PE is 22..one would think that unless it’s competitive edge erodes, it will once again reach that level of valuation.
Anyway, earnings have grown 61% year on year while revenues have grown 15%. Gross margin is a very healthy 36%. Other useful info:
• ROE is 30%
• ROA is 18.5%
• LOGI has zero long term debt….zero.
The CEO is Gerald Quindlen. He is a Chemical Engineer like me. He worked for an oil company like me and he was my classmate at Wharton. He couldn’t drink like me, but he is a good guy, from what I can remember. This is what old Gerry had to say:
“We are pleased to deliver double-digit revenue growth in what has become an increasingly challenging environment,” said Gerald P. Quindlen, Logitech president and chief executive officer. “The strong growth in Asia and OEM, as well as in pointing devices and Harmony remotes, underscores the resilience of our geographic and category diversification. The decline in our gross margin was primarily due to the combination of higher input costs and the mix between retail and OEM sales.
“Given the pervasive economic uncertainty, both in North America and Europe, we are tempering our outlook for growth for Fiscal 2009. We remain bullish on the opportunities across all our product categories and we believe we are well positioned to return to annual growth in the mid-teens when conditions improve.”
So there you go. The Fed has just cut interest rates again to an all time low. The lighter fluid is being thrown on the smoldering grill over and over and over again. When it ignites, these stocks are gonna be on FIRE!!!!
I bought a dirt cheap industrial company that’s been around for over 50 years and a high tech behemoth for a PE of 8. Wow…talk about Christmas bargains! Ho ho ho!!
Tell me what you think of these two stocks.
I am HUGE!
$$$MR. MARKET$$$
http://www.mrmarketishuge.com
The first stock I bought is HURC – Hurco Companies.
• HURC stock price is down over 62% so far in the last 52 weeks (it’s traded as high as 52.12) and was oversold by 30% relative to overall market (so it’s on sale).
• HURC has a P/E value of 4.0.
• HURC has cash on the books of $5/share. So the entire business is being valued at only a little more than $8/share.
• HURC has zero debt.
• Profit margin is 10%
• Operating margin is 16%
• ROA is 13%
• ROE is 20%
• EPS growth is 7.4%
• Revenue growth is 19%
• Book value is $19/share…HURC is trading at a big discount to book value!
Hurco Companies, Inc., an industrial technology company, designs, manufactures, and sells computerized machine tools and integrated computer control systems and software products to companies in the metal working industry worldwide. Its products include general purpose computerized machine tools, which primarily include vertical machining centers and turning centers for the metal cutting industry. The company also produces computer control systems and related software for press brake applications that are sold as retrofit control systems. In addition, Hurco Companies produces and distributes software options, control upgrades, hardware accessories, and replacement parts for its machine tool product lines, as well as provides operator training and support services to its customers.
HURC’s market cap is only $89,000,000. So it is a likely takeover candidate if its stock price doesn’t go up soon (especially with all the cash on its books). There isn’t much not to like about Hurco other than the fact that it doesn’t pay a dividend.
I bought HURC today at 13.94. I will sell it in 4-6 weeks at $16.18. Don’t believe me? Here’s what the boss had to say:
Michael Doar, Chief Executive Officer, stated, ``We are pleased that, even with the sudden sharp decline in sales during the fourth quarter, our results for fiscal 2008 set another record for Hurco, with revenues growing 19% to $223,994,000 and earnings growing 8% to $22,520,000 compared to the prior year. We significantly expanded our product line in 2008 with the introduction of 14 new models at IMTS in September. We believe that these products will allow us to gain a larger share of the machine tool market and extend our customer base when global economic conditions begin to improve.
There is no question that we are significantly impacted by the worsening global economic crisis, as evidenced by the 27% decline in global orders during the fourth quarter. However, we believe that we are well positioned to weather the downturn due to our broad product line and strong financial position. At the end of the year we had cash, cash equivalents and investments of $33,068,000 and no outstanding debt. In addition, we have already taken steps to reduce expenses and inventory levels to reflect lower demand. Our customers are facing significant challenges as the financial crisis has spread to the manufacturing sector. We will continue to focus on the three key areas that have been our emphasis since 2001: customers, profitability and core competencies, which include software automation, efficient manufacturing and global sales distribution.``
================================================== ========
The second stock I bought is an all time favorite high tech stock that continues to make products that everyone wants, and as a result, continues to be very profitable. However in the Wall Street sell off, it’s stock price got unfairly hammered.
If you can imagine a computer accessory, Logitech probably makes it. With more than 200 products on store shelves all around the world, Logitech rides countless technology trends.
Examples include the rise of online video. Logitech holds a huge lead in Web cam sales. Then there's Internet phone service. Logitech sells the equipment. Or the increasingly common use of the computer to play music, for which Logitech provides speakers. And the popularity of fancy keyboards and mice, where wireless and ergonomic versions are top sellers. Don't forget video game controllers, another Logitech specialty. Or a relatively new offering: Universal remote controls to coordinate the increasingly complex technology in living rooms.
Logitech has been increasing sales, profit margins and earnings at a rapid pace. The reason, ANALysts say, is healthy demand for its new products, which sell for higher prices. Their market cap is over $2 billion dollars. They aren’t going anywhere…and they just shipped their billionth mouse.
Today I bought LOGI at 13.44. I will sell it in 4 – 6 weeks at 15.60. Logitech is a great company that makes great products, but the real reason I bought it is because it is cheap.
LOGI’s stock price is down 57% over the last 52 weeks and 41% over the last 3 months. Remember, this is a high tech company, yet its PE is trading at only 8.25. It’s 5 year average PE is 22..one would think that unless it’s competitive edge erodes, it will once again reach that level of valuation.
Anyway, earnings have grown 61% year on year while revenues have grown 15%. Gross margin is a very healthy 36%. Other useful info:
• ROE is 30%
• ROA is 18.5%
• LOGI has zero long term debt….zero.
The CEO is Gerald Quindlen. He is a Chemical Engineer like me. He worked for an oil company like me and he was my classmate at Wharton. He couldn’t drink like me, but he is a good guy, from what I can remember. This is what old Gerry had to say:
“We are pleased to deliver double-digit revenue growth in what has become an increasingly challenging environment,” said Gerald P. Quindlen, Logitech president and chief executive officer. “The strong growth in Asia and OEM, as well as in pointing devices and Harmony remotes, underscores the resilience of our geographic and category diversification. The decline in our gross margin was primarily due to the combination of higher input costs and the mix between retail and OEM sales.
“Given the pervasive economic uncertainty, both in North America and Europe, we are tempering our outlook for growth for Fiscal 2009. We remain bullish on the opportunities across all our product categories and we believe we are well positioned to return to annual growth in the mid-teens when conditions improve.”
So there you go. The Fed has just cut interest rates again to an all time low. The lighter fluid is being thrown on the smoldering grill over and over and over again. When it ignites, these stocks are gonna be on FIRE!!!!
I bought a dirt cheap industrial company that’s been around for over 50 years and a high tech behemoth for a PE of 8. Wow…talk about Christmas bargains! Ho ho ho!!
Tell me what you think of these two stocks.
I am HUGE!
$$$MR. MARKET$$$
http://www.mrmarketishuge.com