Stocks for the Long Term

[antioch6]

At first glance in the Solar area, the trend in solar panel usage looks alright. The sector is going through some sort of consolidation. Main problem as I see it is most companies can't produce the stuff economically yet. Not really practical to use a simple P/E analysis since these companies are losing money. The big name First Solar (FSLR) has been trying to cut costs and sell assets. Alot of the business depends on government subsidies until there is another scare in higher oil prices. Until then, the way to play this Sector is find the companies that will survive bankruptcy and buy them when there is fear of bankruptcy. Can't justify buying FSLR with my valuation metrics since they lose money and the future is cloudy and uncertain. China will help subsidize this area but they are going through their own problems economically right now so the timing isn't quite here yet. I'm going to look for some Solars that have the best economically viable production. Have to study up some more on the industry and get some clues from other people too.

So far I'm interested in FSLR YGE SPWR and CSIQ. These companies should survive for some specific reasons and at the moment I consider them the leaders in the industry. Need to run some spreadsheets on them and look into what sets each one apart from the pack.

Japan and China are driving a temporary surge in demand for these companies. SPWR and CSIQ are doing well in Japan. CSIQ has the cheapest costs of the four. YGE has the most debt. In terms of efficiency, FSLR and CSIQ have the most efficient energy in their technology. In terms of size, FSLR largest, SPWR second, YGE next, CSIQ smallest. SPWR and FSLR have come the furthest the fastest in returning to profitability. The simplest strategy here should be spreading some buys around these four during the next round of bankruptcies.

[antioch6]

I want to bring up another stock Vale S.A. (VALE). This is a Brazilian company with operations all over the world. From FinViz.com:

Vale S.A. engages in the research, production, and marketing of iron ore and pellets, nickel, fertilizers, copper, coal, manganese, ferroalloys, cobalt, platinum group metals, and precious metals in Brazil and internationally. Its Bulk Material segment engages in the extraction of iron ore and pellet production, as well as operation of transport systems in Brazil, including railroads, ports, and terminals related to mining operations. This segment is also involved in the production of manganese and ferroalloys; and mining of coal. The company's Base Metals segment produces non-ferrous minerals, including nickel and copper; and aluminum products. Vale S.A.'s Fertilizers segment provides potash, phosphates, and nitrogen. The company's Logistic Services segment offers cargo transportation services, such as rail transport, port, and shipping services for third parties. In addition, Vale S.A. generates energy through hydroelectric plants and centers in Brazil, Canada, and Indonesia; and has a natural gas exploration portfolio of 18 blocks in 4 petroleum basins in Brazil. The company was formerly known as Companhia Vale do Rio Doce and changed its name to Vale S.A. in May 2009. Vale S.A. was founded in 1942 and is based in Rio de Janeiro, Brazil.

This is a large and diverse company built to last. Brazilian stocks are out of favor and so are companies related to mining. Vale should survive this slump in demand for it's products and go back to earning around $3.00 a share in normal times. This would give it a current 4.8 P/E ratio. Brazil has also recently removed a 6% tax on foreign investors. Vale is still pumping out cash according to a simple cash flow analysis. Compared to generating 7-8 Billion in cash during normal times, it's only generating 800 million - 1.4 Billion now and selling for just under 75 Billion. This is a cyclical company and we are in a downturn, so we should take the cashflows from good times into consideration. When Vale starts generating 7-8 Billion again, that gives it a yield of about 10% at the current price of 75 Billion. On top of that, it has a 5% dividend. The dividend is relatively stable and according to it's history shouldn't be cut more than 25%, leaving it at the worst 3.75%. They do have some debt. I expect the stock to get cheaper, but it's something to consider buying. Similar to the Solar Power companies,Vale is also depending on China for much of it's demand.

[riverbabe]

I have been swing trading NEON for a year or more with success. But some news came out in the last few days that makes it a very long-term play. This article describes it pretty well. http://seekingalpha.com/article/1672...readmore&app=1
Patent stock players know that patent infringement litigation can go on for years, so this is not for the impatient! In fact VRNG is still battling GOOG after a jury verdict in VRNG's favor almost a year ago, and the motions are still flying back and forth. Watch for the spin-off on NEON. Do DD and prepare to wait (and wait and wait). (This is the "long term" thread. Right?)

[riverbabe]

I have been swing trading NEON for a year or more with success. But some news came out in the last few days that makes it a very long-term play. This article describes it pretty well. http://seekingalpha.com/article/1672...readmore&app=1
Patent stock players know that patent infringement litigation can go on for years, so this is not for the impatient! In fact VRNG is still battling GOOG after a jury verdict in VRNG's favor almost a year ago, and the motions are still flying back and forth. Watch for the spin-off on NEON. Do DD and prepare to wait (and wait and wait). (This is the "long term" thread. Right?)

NEON up 9.16% today AM. Here's another article. Looking good! http://seekingalpha.com/article/1674...readmore&app=1

[riverbabe]

NEON up 9.16% today AM. Here's another article. Looking good! http://seekingalpha.com/article/1674...readmore&app=1

Well that shot up to 12+% for a quick 1.1K profit. Will get in again...

[antioch6]

Taking a quick look at my longer term trade ideas thread. Looks like the timing was perfect for the solar companies for a one year trade. VALE is still alive and near the same price after swinging lower for a few years. I saw it down near $5 at some point before trading back up around $15. I'd still be watching FSLR and CSIQ if the solars ever go through another downturn. After six years, I'm much more attracted to my mechanical stock screen versus finding longer term trends and stories from scratch.

On the gold and silver side of things, I like SSRM(Formerly SSRI). The stock has held up well relatively to its group (GDX,GDXJ.SIL). I also like CEF which holds physical gold and silver in Canada I believe. I own SSRM from around $6 and $9 and will buy on any significant declines. The gold and silver stocks are always a bit unpredictable since their earnings aren't steady. CEF is the conservative choice and I might be buying some in the next few weeks, though it is a much slower trade than SSRM. I might be waiting on this one for another six or ten years for 20 or 30 maybe even 50%.

I started my long term ideas with long term meaning a year or longer. For some reason a year makes sense to me as a minimum hold time for stocks because of taxes and giving enough time for something fundamental yet healthy to occur. I don't sense much value in this long winded post... oh well.

[antioch6]

Oh I sold my SSRM yesterday for a 16% gain. 400 bucks. It is speculative and has been going up big while the silver price hasn't. (Might be getting ahead of itself).

[Louetta]

I would recommend four plays here for long-term, two of which are functionally equivalent.

First is STOR, a Buffett favorite, who essentially buy and rent properties in strip malls, as opposed to large store anchored malls, concentrating on businesses which by their nature can't be online-ized out of business. Examples would be barber shops, pool halls, nail (fingernail I point out, since most people here are men) shops, etc. Pays a 4.5% dividend, has recently pulled back under 28 after making new highs up to the 31s consistently since after 10/1.

JDD, Nuveen Diversified Dividend and Income, which invests in dividend-paying common stocks including those of companies that derive revenues from residential real estate and debt securities from governments. It is up to 33% leveraged. Currently at a nine year low paying 10% at the current price. Rated 5 stars by Morningstar for 10 years, 4 stars for 5 years and 3 stars for 3 years.

PFF and PGX. Both are ETFs which invest primarily in preferred shares. Each has recently bounced off a 5 year low as they became less attractive as rates generally rose and now rates seem maybe to have approached near term highs if the Fed backs off. Each pays almost 6%. They may at this level offer hope for capital gains (if one sells). I've bought both just to provide some safety against the remote possibility something happens internally to either (e.g. SEC complaints). I have also held most of my preferreds which are underwater for the same reasons these are and will sell the preferreds gradually as (if) I can get my money back. Might take a while.

(Also reported elsewhere have bought AMZN, MSFT, BST, AAPL.)

[BlueWolf]

I had previously posted a list of candidates on another thread, but since we are moving this discussion here, I will repost, including an update, here. Here’s the list so far:

AAPL, AAXN, ANET, AYX, DATA, EDIT, ISRG, MTCH, MDB, OKTA, SQ, TDOC, TEAM, TTD

I have more to add, but before I do I will try and provide a little discussion on each of these. Let me start with AAPL and MTCH.

AAPL
Yes, I know everybody is saying that iphone and Mac sales have peaked which translates into weak growth for AAPL. What is being overlooked are the new markets APPL is about to penetrate. The biggest of this is augmented reality. Statistics reported that this market was about $14.1B in 2017. They also estimated that this market will grow to $219B by 2022. There are other estimates that vary anywhere between $60B to $500B by 2022/2023. Anyway you cut it, the point is that there is an incredible growth opportunity here. In fact, one report predicted that the Compound Annual Growth Rate (CAGR) of the AR/VR industry is expected to be in the range of 40%-80% through 2023. Just as a comparison, the CAGR for smart phones is predicted to be 7.9% through 2024. That’s a pretty healthy growth rate, and AAPL will be riding the wave of that growth, but when you add in the AR market, things start looking really spectacular. How do we know that AAPL is going to enter the AR market. Well, aside from introducing the ARKit development platform last year, there are also numerous AAPL patents related to AR capable hardware. OK, this is all starting to sound pretty good, but wait, there’s more. AAPL is apparently looking to get into the car business. According to Bloomberg, AAPL is currently developing an electric car called “Titan” and has 5,000 employees dedicated to the project. In early 2017, Apple was also granted a permit from the California DMV to test self-driving vehicles on public roads. That sounds like a pretty serious commitment to me. What’s the timetable? Well, that has everyone wondering, but the best guess by industry pundits is that the Apple car will probably launch sometime between 2023 and 2025. When it does launch, AAPL will be adding automobile sales to the bottom line. This sounds like a growth story to me and growth is what powers share price, so I am bullish on AAPL for the long term.

MTCH
I’ll start by cutting and pasting from my discussion on the other thread ...

I added the current Mr. Market pick, MTCH, to my list of long term buy candidates. After digging a little, I like the long term prospects of MTCH. Here’s some information I uncovered: “In 2017, online dating became the most common way for newlyweds to meet one another. The Knot surveyed more than 14,000 engaged or recently married individuals and reported that 19% of brides said they met their spouses online. This is a significant increase from the 5% of American couples who said they met online in a 2015 Pew Research poll. According to the Knot, meeting via dating sites has now surpassed more traditionally popular venues, including through friends (17%), during college (15%), and at work (12%).” The growth potential here is obvious and Match is the dominant player in this space by far. In particular, there are real growth opportunities for Match in Asia and South America with one analysis predicting 7% annual growth in the industry through 2020. Morningstar was somewhat bullish on the stock and in their analysis said “Our projections represent a five-year (2018-2022) compound annual growth rate of 17% for revenue and a five-year average operating margin of 37%.” Not bad. Not bad at all. It certainly warrants being added to my list of candidates.

More on the rest to come.

[BlueWolf]

What a wild day! It was a great day for scalping long, but I also started nibbling at some long term positions. Technically, the overall market trend hasn’t changed so I’m taking a risk, but today’s action by the bulls was hard to ignore. It was the single biggest gain in the markets on a jobs report day since 2002. I’ve been crazy busy so I will post more details this weekend.