Covestor - adviceinvest Blog

Hits and Misses

Mon, 04 Feb 2008 19:02:45

A few hits to watch:

Capital Source (CSE) - No brainer buy, Its a REIT, lender, bank and private equity firm all in one with great management and a whopping dividend. Should continue to climb back towards 20. I Own it

Allied Capital (ALD) - This private equity firm is sticking with its 65 cent dividend, not too shabby, thats why I own it. Still down 20% over the past three months.

Jet Blue (JBLU) - The best airline when it comes to brand. People willing to pay a premium for good service and comfort. Now starting international codeshare model that others will try and follow. Even an 11 hour delay could not take this airline down. Going back to 10. I own this as well.

A few misses to stay away from:

Motorola (MOT) - Have lost the handset battle permenantly, not much else to get excited about when they sell it off. Don't own it.

Verizon (VZ) - Spending billions on FIOS, a heap of debt that will take years to overcome with too much competition from Comcast. Don't own either of em.

Google (GOOG) - Stay away from this one. Still too expensive. They need a 5 for 1 stock split bad. They also need to stick with what they are great at...advertising, instead of overhiring and trying to compete in industries where they don't have a clue. Don't own it...could'nt even afford it!

Related Stocks: ALD, CSE, GOOG, JBLU, MOT, VZ

TXRH Watchlist idea

Wed, 16 Jan 2008 18:01:57

Texas Roadhouse offers a reasonable product at a reasonable price. Menu prices slightly lower than competing steakhouse chains, and reasonable cost controls, gives this company an edge especially when consumer spending is in a downturn. People will always eat out, which is why less expensive quality restaurant chains will hold their own during the downturn. TXRH is one of those and I hold a long position in this well run company.

Related Stocks: TXRH

CAKE Watchlist idea

Wed, 16 Jan 2008 18:01:57

Cheesecake Factory is the elite in the casual dining industry, which all other chains are measured against. Even in an economic downturn, the lines are still out the door on any given Saturday night. Although commodity and labor costs have increased industry-wide, they will always be ahead of the pack. I highly recommend this stock which is near a three year low and a bargain. I have held long positions in this stock since my very first visit to the chain in 1997 and continue to hold.

Related Stocks: CAKE

ALD Watchlist idea

Wed, 16 Jan 2008 18:01:10

Allied Capital is a well run conservative private equity firm which invests medium sized companies. The stock has been beaten down from the low 30's form the industry-wide credit crunch. The dividend exceeds 10% and that alone make this stock a buy. I have a long position in ALD.

Related Stocks: ALD

CSE Watchlist idea

Wed, 16 Jan 2008 18:01:17

With a dividend over 10%, this private equity lender has a bright future. Capital Source provides loans to private equity companies and has recently purchased a bank to help fund additional investments during the current credit crunch. The stock is around its 52 week low and will move up when market jitters subside hopefully by June. I have a long position in CSE.

Related Stocks: CSE

CRY Watchlist idea

Wed, 16 Jan 2008 18:01:17

Cryolife is a biotech company that actually has a viable business model and makes money. The company has had lawsuits related to its tissue preservation business but is now back on track. The stock once traded over 40$ and should be headed in that direction over the next 5 years if there are no misteps. I currently have a long position on CRY.

Related Stocks: CRY

Siriusly!

Wed, 16 Jan 2008 18:01:55

Sirius is a high risk and is surely not a sure thing. If the merger with XM ever happens, this stock will benefit a bit. This only has a chance of success in the longer term. If the merger occurs, they will need to decrease costs and find a way to profit, which will take at least two years. Their product exceeds XM and includes a wide array or music, news and sports content. For this reason I hold out for an improvement in the stock price.

Related Stocks: SIRI

ETrade still kicking

Wed, 16 Jan 2008 18:01:23

ET - ETrade continues to be a viable on-line brokerage even with the sub prime mess it got into over the past 5 years. The stock has been unfairly punished and is due to make a move up. This reward is well above the risk here and I would recommend it as a moderate risk to your portfolio. I will hold and wait because eventually they will get past their sub prime mess and should avoid rumored bankruptcy.

Related Stocks: ETFC

Depomed

Wed, 16 Jan 2008 18:01:55

Depo is a specialty pharmaceutical company that specializes in oral delivery technology to reduce dosages of drugs. They hold a number of patents and market a diabetec drug and are looking for other pharmas to partner with. This is a high risk investment at a fairly cheap price and low P/E. For the long term, I believe they will find other drugs to market to increase revenue and increase profitability.

Related Stocks: DEPO

Jet Blue ahead of the pack

Wed, 16 Jan 2008 17:01:57

JBLU - Jet Blue is a standout in the Airline industry that deserves more respect, except from those folks that waited 11 hours on the tarmac! The stock has been beaten down way too much and should move back up if oil can stay below $90.00 or if fares are increased industry-wide. They always take the lead in service and perks which allows them to charge higher fares than other low cost carriers. They offer Directv on all flights and are looking to provide internet or email service in-flight. I don't see this as a big winner in your portfolio however if you don't mind the ups and mostly downs of the airline sector, this is one I would choose.

Related Stocks: JBLU

Apollo Invests for your future

Wed, 16 Jan 2008 17:01:31

AINV - Apollo Investment corp is a business development private equity company that invests in a wide array of companies. In other words they make loans or take stakes in small to medium sized companies. They have a diverse portfolio to help get through the rough times like 2008. Check out their website which clearly describes the investments so that you can determine if this fits into your portfolio. I highly recommend it as a long term hold. Although volatile, the dividend will make up for any dips in the stock.

Related Stocks: AINV

BRLC deserves respect

Wed, 16 Jan 2008 17:01:07

BRLC makes the Olevia brand LCD HI-Def television found in Target, BJs, Sears, Circuit City and many local retailers in the U.S. as well as China and South America. They are known for their high quality product at reduced prices. They are priced lower than Panasonic, Sony Brevia and Toshiba LCD TVs to name a few however the technology is equal if not better. Sales have tripled over the past year. They have takean a recent hit because of lowered guidance. What investor's don't realize is the revenue was guided lower because the company has decided to reduce risk in China by licensing the technology to a Chinese company and just receive royalty payments or what I would call pure profit. The company's profit margins should increase in 2008.

Related Stocks: BRLCQ

Pfizer for the future

Wed, 16 Jan 2008 17:01:08

PFE is the second largest pharma in the world (only becuase they sold their consumer products division to J&J). They spend more on R&D than any other pharma company and are looking to spend their 20+ billion stockpile to co-market and partner with biotechs and other companies. PFE is not something you short, its a long term holding that should be part of any smart investor's profile for the 5.5% dividend alone. Remember its a long term hold of more than 5 years.

Related Stocks: PFE