9/10/2014
I've been making a few longer term orders (GTC) based on the idea that the VIX is a little too low given the current orders of the day, and quite possibly trending significantly upward. With that in mind, I've placed a number of orders for stocks that I think have long term growth potential or are good pick ups on possible price changes.
PCP, BA, WRE, FDX, DIS, AAPL, MO, KO, AI
The trend of the towers themselves look familiar to me from the last two/three cycles, recession included. 2015 to 2016 should be an interesting year, I'm expecting a sharp spike up in the ^VIX.
Here are my targets, and again I don't expect most of these stocks to hit this point, just that they'd be worth picking up if they did. PCP 211, BA 115, WRE 22.5, FDX 140, DIS 85, AAPL 87, MO 37, KO 38, AI 26.
Precision Castparts Corp (PCP) makes parts for the Aerospace & defense industry. I like it's place in aerospace and also in power generation as primary factors but I like the general industrial applications as well as medical. Currently trading at 242.27, PE 19.39x, 0.05% Div, 34.8B Cap, 143.5 shares out. 91.55% held by institutions.
Boeing Co (BA) is an aircraft and defence contractor, and another I'd want to undergo a reasonably significant drop before I picked it up. Commercial flights are down, the 787 isn't fully in the air yet, future methods of travel aren't yet fully realized. The F22 is nearing the end of it's productions and the Join Strike fighter is in cost over runs, which was kinda the thing it was meant to curb. Trading at 128.22, PE 19.31x, 2.28% div, 92.4B Cap, 720.6M shares out, 71.84% held by institutions.
Washington REIT (WRE) a REIT dealing with the Washington D.C. area, D.C. is unlikely to be going away anytime soon. Obama has been expanding the government, I expect the next president and Congress to do the same. I'm not wild about the area, but it's got potential. WRE is set up to pay out it's profits in dividends so it's earnings per share are -0.06 Currently at 27.50, P/B 2.29x, P/Sales 6.87x, Price/cashflow 20.77x, 4.26% div, 1.8B Cap, 66.6m outstanding, 75% held by institutions.
FedEx Corp (FDX) is one of two major shippers, the other being UPS. They face a lot of the same obstacles as the broader commercial airline industry: narrow margins, unknown fuel costs, high capital costs for new aircraft. Currently 150.76, PE 22.26x, P/S 0.94x, P/B 3.14x, P/Cash 9.14x, Div 0.53%, 42.8B, 284M shares, 77.14% held by institutions.
Walt Disney Co (DIS) I wouldn't be opposed to pursuing a little more aggressively. With it's acquisition of Marvel & ILM, significant stake in ESPN, and all of it's licencing deals in the climate of never ending copyright that it's created for itself, this is a company you should own until the world comes to it's senses and reduces copyrights to something less than 50 years. I like Hasbro (HAS) too as the company that does a lot of the licencing for merchandise for what are essentially 90 minute commercials created by Disney. It's an impressive money making engine, and you can get on both sides of it. Currently 89.52, PE 21.48x, PS 3.2x, P/B 3.35x, P/Cash 15.11, 153.7B cap, 1.7B shares, 61.48% held by institutions.
Apple Inc (AAPL) is the perpetual hype engine that churns out pretty, if somewhat insignificant and inferior, products for your grandmother and hipsters, end of demographic? No apparently female celebrities with significantly more beauty then sense used them to take nude photos and videos of themselves and blah blah blah got hacked (a.k.a. the Fappening). As much as I fear this company's foolishly high valuation, I think the down turn around 9/1 would only last about a week before people in the market will stop letting it affect the price. The 104 to 98 drop (6%) wasn't sexy enough for me personally, I was hoping for a 10% drop at least to about 93 to entice me. But, I really don't believe in this company. It has great marketing, but not a great product and to protect me from the downside risk of the market realizing that because of this little scandal I set my price at 87. As of this write up it's at 101.00, PE 15.82x, P/S 3.29x, P/B 4.85x, P/Cash flow 12.67x, 1.92% div, 604.8B cap, 6.0B shares, 58.43% held by institutions.
Altria Group Inc (MO), formerly known as Philip Morris Companies, is basically a tobacoo company with a little bit of interest in wine and nicotine itself. Nicotine is an addictive habit forming substance (like Caffeine and Alcohol) so makes for consumers who really like your product and will continue to buy it long term. Nicotine has some benefits and some drawbacks which I've previously spoken about. Seeing as I already have holdings, 37 is my add on price. With the VIX so low and the talking heads generally sure that there won't be another down turn money should exit from MO and go into higher performing assets. When that occurs, you should pick it up. Then if you have some nice holding of MO when the market tanks you should sell them back to the market when MO skyrockets again. At least that's my plan. Currently 43.34, PE 20.14x, P/S 3.55x, P/B 19.7x, P/C 19.12x, 4.77% div, 86B cap, 2B shares out, 57.32% held by institutions.
What I think about the Coca-Cola company (KO) is identical to what I think about MO. I suggest 38, same reasons. Currently 41.87, PE 22.42x, P/S 3.98x, P/B 5.4x, P/C 17.7x, 2.91% div, 183.6b cap, 4.4b out, 58.73% held by institutions.
Arlington Asset investment Corp (AI) is your opportunity to make money from home loans via direct interests in residential mortgage backed securities, naturally backed by Fannie Mae & Freddie Mac as well as some higher risk loans (with higher returns). I priced this one at a more realistic 26, though 27 is probably a fair price. Currently at 27.61, PE 7.11x, P/S 7.9x, P/B 0.88x, P/Cash 15.58, 621.4M cap, 22.5M out, 33.67% held by institutions.
As always these opinions are offered for information purposes only, I have actions for or against all the companies listed in this write up. Please consult a broker or advisor before taking any action on any securities mentioned.
I've been making a few longer term orders (GTC) based on the idea that the VIX is a little too low given the current orders of the day, and quite possibly trending significantly upward. With that in mind, I've placed a number of orders for stocks that I think have long term growth potential or are good pick ups on possible price changes.
PCP, BA, WRE, FDX, DIS, AAPL, MO, KO, AI
The trend of the towers themselves look familiar to me from the last two/three cycles, recession included. 2015 to 2016 should be an interesting year, I'm expecting a sharp spike up in the ^VIX.
Here are my targets, and again I don't expect most of these stocks to hit this point, just that they'd be worth picking up if they did. PCP 211, BA 115, WRE 22.5, FDX 140, DIS 85, AAPL 87, MO 37, KO 38, AI 26.
Precision Castparts Corp (PCP) makes parts for the Aerospace & defense industry. I like it's place in aerospace and also in power generation as primary factors but I like the general industrial applications as well as medical. Currently trading at 242.27, PE 19.39x, 0.05% Div, 34.8B Cap, 143.5 shares out. 91.55% held by institutions.
Boeing Co (BA) is an aircraft and defence contractor, and another I'd want to undergo a reasonably significant drop before I picked it up. Commercial flights are down, the 787 isn't fully in the air yet, future methods of travel aren't yet fully realized. The F22 is nearing the end of it's productions and the Join Strike fighter is in cost over runs, which was kinda the thing it was meant to curb. Trading at 128.22, PE 19.31x, 2.28% div, 92.4B Cap, 720.6M shares out, 71.84% held by institutions.
Washington REIT (WRE) a REIT dealing with the Washington D.C. area, D.C. is unlikely to be going away anytime soon. Obama has been expanding the government, I expect the next president and Congress to do the same. I'm not wild about the area, but it's got potential. WRE is set up to pay out it's profits in dividends so it's earnings per share are -0.06 Currently at 27.50, P/B 2.29x, P/Sales 6.87x, Price/cashflow 20.77x, 4.26% div, 1.8B Cap, 66.6m outstanding, 75% held by institutions.
FedEx Corp (FDX) is one of two major shippers, the other being UPS. They face a lot of the same obstacles as the broader commercial airline industry: narrow margins, unknown fuel costs, high capital costs for new aircraft. Currently 150.76, PE 22.26x, P/S 0.94x, P/B 3.14x, P/Cash 9.14x, Div 0.53%, 42.8B, 284M shares, 77.14% held by institutions.
Walt Disney Co (DIS) I wouldn't be opposed to pursuing a little more aggressively. With it's acquisition of Marvel & ILM, significant stake in ESPN, and all of it's licencing deals in the climate of never ending copyright that it's created for itself, this is a company you should own until the world comes to it's senses and reduces copyrights to something less than 50 years. I like Hasbro (HAS) too as the company that does a lot of the licencing for merchandise for what are essentially 90 minute commercials created by Disney. It's an impressive money making engine, and you can get on both sides of it. Currently 89.52, PE 21.48x, PS 3.2x, P/B 3.35x, P/Cash 15.11, 153.7B cap, 1.7B shares, 61.48% held by institutions.
Apple Inc (AAPL) is the perpetual hype engine that churns out pretty, if somewhat insignificant and inferior, products for your grandmother and hipsters, end of demographic? No apparently female celebrities with significantly more beauty then sense used them to take nude photos and videos of themselves and blah blah blah got hacked (a.k.a. the Fappening). As much as I fear this company's foolishly high valuation, I think the down turn around 9/1 would only last about a week before people in the market will stop letting it affect the price. The 104 to 98 drop (6%) wasn't sexy enough for me personally, I was hoping for a 10% drop at least to about 93 to entice me. But, I really don't believe in this company. It has great marketing, but not a great product and to protect me from the downside risk of the market realizing that because of this little scandal I set my price at 87. As of this write up it's at 101.00, PE 15.82x, P/S 3.29x, P/B 4.85x, P/Cash flow 12.67x, 1.92% div, 604.8B cap, 6.0B shares, 58.43% held by institutions.
Altria Group Inc (MO), formerly known as Philip Morris Companies, is basically a tobacoo company with a little bit of interest in wine and nicotine itself. Nicotine is an addictive habit forming substance (like Caffeine and Alcohol) so makes for consumers who really like your product and will continue to buy it long term. Nicotine has some benefits and some drawbacks which I've previously spoken about. Seeing as I already have holdings, 37 is my add on price. With the VIX so low and the talking heads generally sure that there won't be another down turn money should exit from MO and go into higher performing assets. When that occurs, you should pick it up. Then if you have some nice holding of MO when the market tanks you should sell them back to the market when MO skyrockets again. At least that's my plan. Currently 43.34, PE 20.14x, P/S 3.55x, P/B 19.7x, P/C 19.12x, 4.77% div, 86B cap, 2B shares out, 57.32% held by institutions.
What I think about the Coca-Cola company (KO) is identical to what I think about MO. I suggest 38, same reasons. Currently 41.87, PE 22.42x, P/S 3.98x, P/B 5.4x, P/C 17.7x, 2.91% div, 183.6b cap, 4.4b out, 58.73% held by institutions.
Arlington Asset investment Corp (AI) is your opportunity to make money from home loans via direct interests in residential mortgage backed securities, naturally backed by Fannie Mae & Freddie Mac as well as some higher risk loans (with higher returns). I priced this one at a more realistic 26, though 27 is probably a fair price. Currently at 27.61, PE 7.11x, P/S 7.9x, P/B 0.88x, P/Cash 15.58, 621.4M cap, 22.5M out, 33.67% held by institutions.
As always these opinions are offered for information purposes only, I have actions for or against all the companies listed in this write up. Please consult a broker or advisor before taking any action on any securities mentioned.