The College Bowl Top 5

[mrmarket]

Here are your finalists. I'll buy one of these within the next two days. Which one do you like, and why?

ACRG.OB ARLP CME CRDN MPX

[douhou]

THANKS for posting these stocks. I will check them out and see if I can pick the one you do. I am almost certain I cannot do it. Why? Because you are the best I have ever seen in picking winners. Keep it up!!

[buckhunter]

Only because I bought it when you highlighted it a month ago. You went with MCRI, but ARLP has held up pretty well while other energy-related stocks have taken a pounding. I should have gone with MPX months ago when they made one of your other Final Five. CME can't go up forever (can it?) and it looks like we're a day late with CRDN.

[Websman]

ACRG.OB sounds good to me

[jiesen]

Only because I bought it when you highlighted it a month ago. You went with MCRI, but ARLP has held up pretty well while other energy-related stocks have taken a pounding. I should have gone with MPX months ago when they made one of your other Final Five. CME can't go up forever (can it?) and it looks like we're a day late with CRDN.
Out of these 5, I'd say ARLP is the surest to hit the 15%, but I don't think it'll be the fastest to do it. I should have bought it last time, when I saw it trading at 60, and I might pick it up here anyway, as it's still a great value- and paying 4% as well.

By the way, ARLP has been in your last 3 top 5. First time was 30% ago ($51)!

[tokyojoeskid]

Im going with MPX, my pops is going to buy a boat next spring. I want a Mastercraft, but boats are hot right now.

[df21084]

I like ARLP. It looks as through there's plenty left in this stock, and with a P/E of 16, it seems a bargain. And, like jiesen says, a 4% dividend ain't too bad.

Rounded P/E ratios:

ACRG.OB - 9
ARLP - 16
CME - 40
CRDN - 40
MPX - 33

I don't know to judge the bb stock, so I would probably stay away from it.

ARLP is what I would pick, but what do I know?

[Gatorper]

ACRG.OB
Is that ACR Group, Inc?

[df21084]

Is that ACR Group, Inc?

Yes it is. What are your thoughts regarding this stock?

[mrmarket]

Yes it is. What are your thoughts regarding this stock?

Well...for one thing, I really like its chart, its valuation and its earnings and revenue growth. These guys seem to know how to make a buck.

It looks like a $$$MR. MARKET$$$ stock to me (but so do the other 4!!)

[dmk112]

MM,

Can you tell us why you picked those 5?

[jiesen]

My guess is that he picked those 5 using the same model he's used for all of his other picks. The model is described on his homepage...

Of course if you run the same model and get different results, by all means please let us know!

from $$MM's homepage:

http://members.aol.com/ebarsamian/

HOW MY STOCK PICKING MODEL WORKS



I developed a stock-picking model when I was in graduate school to take advantage of the bullishness the market was exhibiting at the time. The premise was to invest in high beta stocks while trying to limit my downside exposure in the event of a stall or downturn. By using the quantitative steps in the model, stocks are selected that are experiencing sustainable price momentum. The model is a multistep screening and high-grade process that goes something like this:


First, create a universe of about 200 stocks that have demonstrated strong price appreciation and earnings growth in the last 12 months. You can find some pretty good free and easy to use screening tools on the Internet such as Quicken, Stockpoint or MSN. I use the following screening criteria to build my universe of stocks:

Screen #1: Stocks making new highs with IBD EPS rating of 90 or higher

Screen #2: Stocks within 2% of their 52 week high with a 52 week price appreciation > 300%

Screen #3: Stocks within 5% of their 52 week high with a 52 week price appreciation > 150% and EPS growth of 25%

Screen #4: Stocks within 5% of their 52 week high with a 52 week price appreciation > 125% and P/E < 50

Screen #5: Stocks within 5% of their 52 week high with a 52 week price appreciation > 50% and P/E < 15

Screen #6: Stocks within 10% of their 52 week high with a 52 week price appreciation >100% and P/E < 100 and 3 year earnings growth of 50% and 5 year sales growth of 25%

Screen #7: Stocks with Investors Business Daily Ratings greater than 95 EPS and 95 RS.

Screen #8: Stocks with Investors Business Daily Ratings greater than 90 RS and PE less than 20.



<LI class=MsoNormal style="COLOR: navy">Each screen will yield about 20 – 25 stocks. Rank these stocks on the following criteria: Price Appreciation, Price Appreciation divided by trailing 12 month P/E, Price Appreciation divided by forward 12 month P/E. Weight each criterion equally and rerank the database. This process favors stocks with more reasonable valuations and weeds out those with no earnings.

<LI class=MsoNormal style="COLOR: navy">Take the top 20 stocks and rank by 12-month revenue growth.

<LI class=MsoNormal style="COLOR: navy">Take the top 10 stocks and run a time series regression analysis on the daily prices for the last 12 months and rank by the highest r-squared correlation coefficient.

<LI class=MsoNormal style="COLOR: navy">Take the top three stocks in order and perform due diligence to determine if there were any one time non – operating factors that affected the data just analyzed (asset sales, lawsuits, financing, etc.) or if there is any pending news of significance that could upset the applecart. Select the highest ranked stock that clears this hurdle.

Buy this stock. In a typical bull market, the stock will, on average, achieve a 15% gain within 4 to 6 weeks. Sell the stock and repeat the process. Why sell so soon? Well there are ever changing phenomena going on in the market that could make your selection criteria quite different a month after the signals told you to buy this stock. The theory here is that you are selling a potentially "tired" stock and trading it for a "fresh" one.

What this process is trying to do is to select a hot growth stock that has a little more juice left in it to get you that last 15% without being so hideously overvalued that it could drop like a rock. I don’t think I need to buy stocks with extended valuations to make a quick profit. There are stocks out there with good momentum that aren’t bad to hold if I make a wrong decision. I think my model finds them. My model has been successful in protecting me from real lemons. Preservation of capital is always important. Buying companies with real earnings protects me in the down markets. We all work hard for our money. It makes no sense to give it away. That’s why I believe it’s important to buy stock in companies with real earnings.

[jiesen]

Here are your finalists. I'll buy one of these within the next two days. Which one do you like, and why?

ACRG.OB ARLP CME CRDN MPX
http://story.news.yahoo.com/news?tmpl=story&cid=1802&e=3&u=/washpost/20041213/ts_washpost/a59924_2004dec12

The army's going to be buying lots of armor in the immediate future... this has to be a good thing for CRDN. Maybe that's why investors are flocking to it.

"Ceradyne, Inc. develops, manufactures and markets advanced technical ceramic products and components for defense, industrial, automotive/diesel and commercial applications. The Company's primary products include lightweight ceramic armor for soldiers and military helicopters; aesthetic ceramic orthodontic brackets; durable, reduced friction, ceramic diesel engine components; ceramic-impregnated dispenser cathodes for microwave tubes, lasers and cathode ray tubes, and ceramic industrial components for erosion and corrosion resistant applications. The Company has also developed the following products: missile radomes (nose cones) for the defense industry; ceramic crucibles used for melting silicon in the photovoltaic solar cell manufacturing process; corrosion resistant ceramic components sold to semiconductor equipment manufacturers, and lightweight ceramic armor for incorporation into civilian and military vehicles."

from:
http://finance.yahoo.com/q/pr?s=CRDN

[stocks54]

I will go with MPX.

[df21084]

I like ARLP. It looks as through there's plenty left in this stock, and with a P/E of 16, it seems a bargain. And, like jiesen says, a 4% dividend ain't too bad.

Rounded P/E ratios:

ACRG.OB - 9
ARLP - 16
CME - 40
CRDN - 40
MPX - 33

I don't know to judge the bb stock, so I would probably stay away from it.

ARLP is what I would pick, but what do I know?


If screen # 8 (Screen #8: Stocks with Investors Business Daily Ratings greater than 90 RS and PE less than 20) returns stocks with a PE < 20, then why are CME, CRDN, and MPX on the list? It would seem that only ACRG and ARLP qualify. Since I don't subscribe to IBD, I don't know what the RS is for any of these stocks.

Am I missing something? Thanks.

[mooddude]

MM writes "Each screen will yield about 20 – 25 stocks." In other words, those are separate lists.

[df21084]

Thanks. I didn't realize they were separate lists.

[Risky]

It would be REALLY nice to see Mr. Market add a Great Capital Goods Small cap like acrg.ob to his (our) portfolios!
Risky

[scifos]

CME is my choice

[Jaws57]

My pick is ACRG.OB lets make it interesting with a bulletin board pick.

Ever hear of "GLOBAL WARMING", these guys are in the right business.

Jaws57

[IIC]

You want 15%...ARLP is my choice...I stay away from .ob's and .pk's except for quickies. CME...too expensive for my taste...CRDN...not bad...MPX???

[mooddude]

ARLP (main reason: coal is smoking)

Looking at the original screen BXG seems to be a good one, too.

[grebnet]

Anyone know about their debt ??? I thought this stock looked OK except for their huge debt so I stayed away Thanks

[jiesen]

Anyone know about their debt ??? I thought this stock looked OK except for their huge debt so I stayed away Thanks
yeah, I was thinking the same. I really like ACRG, and may pick up some if the price is right. But big debts is usually what gets companies relegated to the .ob and .pk lists. It's a problem, but one that could be managed with good earnings (with some potentially lucrative results)... question is, can ACRG do that? More study may tell...

[jiesen]

May as well ask $$MM:

When you looked at the latest top 5, were there any specific red flags about ACRG that turned you away from it?

[mrmarket]

May as well ask $$MM:

When you looked at the latest top 5, were there any specific red flags about ACRG that turned you away from it?

No red flags. CME was better.

[jiesen]

ok, that's what I thought. Thanks!

[jiesen]

http://story.news.yahoo.com/news?tmpl=story&u=/chitribts/20041216/ts_chicagotrib/pentagonallvehiclesarmoredbyjune
anyone see this as a good sign for CRDN?

[Gatorman]

http://story.news.yahoo.com/news?tmpl=story&u=/chitribts/20041216/ts_chicagotrib/pentagonallvehiclesarmoredbyjune
anyone see this as a good sign for CRDN?
The direct impact should be on companies such as AH and DHB but since everybody is talking about protection of the troops, would think CRDN should also benefit.

[Gatorman]

The direct impact should be on companies such as AH and DHB but since everybody is talking about protection of the troops, would think CRDN should also benefit.
Well, it sure seemed like a good idea at the time. Unfortunatley, both CRDN and DHB are down at the moment. Perhaps the theory will play out later, perhaps not.

[dodgeman]

All of the top 5 looked interesting, but MPX just called out to be bought. So bought MPX on Friday at 27.79