stock market

some say base metals - namely Zinc, are due to fly this year

Keep asking for investment information on running web sites, you'll do well.

You know most of the people on this site are more than just runners. Running is not our profession, well at least for most of us. I'm sure there are several brokers and invesment bankers on this website. Although it probably isn't proper to ask on this board, since the talk should be running related, it isn't a terrible idea.

And as far as the market unfortunetly you missed a pretty good mover in Clorox (CLX) that was at 48 just past march and is now just over 58. About a 21% return. Not bad for a 10 month period. If I were you I would stick to safe stocks, you can make a 10% return per year. Tech stocks can give that to you in one day, but then again they can lose the same.

Oh and CLX also had a two year return of just about 50%. You just need to find the right time to buy.

standard oil

sirius

Market analyses indicates energy stocks will continue to do well.

Exxon Mobile XOM

British Petroleum BP

Kinder Morgan KMP

Or opt for safer returning mutual funds in the energy sector.

Fidelity select Energy service FSESX 34.9% 1yr return and 16.8% 10 yr return

International funds should do well too.

Oppenheimer Global oppurtunities OGICX 28.9% 1yr return and 15.01% 10 yr return

Both of these funds outperformed many stocks last year.

Also, check out these stocks

Starbucks SBUX

Praxair PX

Fuck mutual funds

rambus baby...it\'s going to be huge. intel products in p.s. 3 and judge just ruled in favor of them over infineon and a bunch of people who had stole their products. it\'s a stock that sky rocketed not too long ago to over 100 but is down below 20 and is expected to shoot back up in a few months. very good long term...but i\'m just the son of a guy whose really into stocks and rambus.

HUM

PHS

TOL

Invest in Jesus. You'll never lose.

Paleo-Con investors are pulling out of the market. They want to get out before the big turn south (and before you and I start to pull back). The market is controlled by emotional forces. The Paleo-Cons with the big money are emotionally distraught by the 6 billion dollars per month going into Iraq.

My opinion is that stock brokers are lucky to have a job. Time after time, amateurs have gone up against stock brokers and done as well or better. Same goes for the standard throw a dart at the stock sheet and pick what is hit.

Stock brokers may understand the reason for why a stock goes up or down better than most, but as far as predicting when that will happen, it's all a crap shoot. Stock analysts had predicted my company's stock to reach 50 plus. Well, within months of that prediction, the stock climbed to 32 for the high, and then plummeted all the way to $1 and the company was sold. This happens all the time.

Diversify, buy high risk stocks if you're more than 10 years away from retirement, get more conservative as you get closer to retirement, stay in it for the long haul.

Maximize your profits by stopping frivilous spending and invest all that you can.

John Molvar’s Stock Picks for 2005

December 27, 2004

These are my best stock picks as of December 27, 2004. As always, I am using Peter Lynch’s techniques for picking stocks. As usual, I can say that my stock picks have very little in common with each other except that they all appear to be undervalued at current prices compared to the future earnings potential. You will see I have many of my favorite types of investments including retailers and restaurants, many of which I have owned for years. I am very optimistic about all of these picks. For example, even the lowest ranked pick below, I expect to at least rise at least 50% over the next 12 months if every thing goes perfect (economy remains strong, no major geopolitical disasters, strong stock market, the individual company executes as expected, etc.). Of course we don’t live in a perfect world and it is important to remember that 30-35% of my picks turn out to be failures in that I end up selling them at a loss and a few of them at substantial losses of greater than 50%. Buyer beware (laugh)!

Note: Price Earnings ratios (P/E) are based on 2005 estimated earnings.

1) Kos Pharmaceutical (KOSP) – Mid cap fast growing drug company specializing in cardio and respiratory drugs. Pros: Earnings were up over 100% in ’04 and will be up at least 50% in ’05 and P/E is 7. Company has cash of 6 dollars per share and is debt free. Insiders own 52% of stock and Institutions own only 36%. The company has the only drug in the world that increases “good” cholesterol. Cons: Generic drug maker Barr Labs has sued, as they do routinely with all blockbuster drugs, to try to void their cholesterol drug patent and the case goes to trial in March of 2006. Barr is given little chance of winning, but if they won, it would be devastating to Kos. An analyst from Deuche Bank who is shorting the stock brings up the court case every couple of months as if it is new news and it knocks the stock for a loop for a few days. The analysts don’t believe the earnings growth is sustainable, but they are forced to raise estimates every quarter. Price: 37.

2) International Absorbents (IAX) – Tiny micro cap manufactures “environmentally friendly” kitty litter, bedding for farm animals and spill absorbent material. Pros: Earnings in ’04 were up more than 70% and are expected to be up another 40% in ’05 and P/E is 8. Company just opened a new state of the art manufacturing facility in Georgia which should increase operational efficiencies. Company has manageable 0.5 dollar per share in net debt. No analyst follow the company. Insiders own 15% of shares and institutions only own 4%. Cons: Quarterly earnings are solid but wildly erratic. Company had to take on debt to build new facility. Price is 5.

3) Twin Disk Industries (TWIN) – Small cap manufacturer of heavy duty transmissions for marine and industrial applications. Pros: Earnings are projected to be up at least 50% and P/E is 8. Insiders own 25% of shares. Institutions only own 35% of shares. No analysts follow the company. Pays a dividend yielding 3%. Operates in a niche industry with little competition. Cons: Operates in a no growth industry that is cyclical in nature. Price is 24.

4) Rick’s Cabaret (RICK) - Tiny micro cap operates 7 gentlemen’s clubs in 5 states. The clubs are located near Pro sports stadiums and are geared to black pro athletes and black middle managers in large companies. Pros: Earnings are soaring and the P/E is less than 10. They are about to open a new club near MSG and Yankee stadium in NYC. They have the whole country to expand to and face only local competition and no corporate competition. Insiders own 25% of stock and insiders are buying stock like crazy. Institutions own only 3% of shares and no analysts follow company. Cons: Company is at the whim of local corrupt politicians and one shooting or Big Dan’s type incident could ruin a clubs business. Earnings are good, but erratic from quarter to quarter. Price is 2.5

5) Bradley Pharmaceutical (BDY) - Small cap drug company. Pros: The company says earnings will be up more than 50% in ’05 and PE is 10. Only 2 analysts follow the company. Company has more cash than debt. Insiders own 12% of stock. Insiders are buying the stock. Cons: Erratic long term record and small portfolio of drugs. Institutions own 88% of shares. Short sellers own a massive 30% of stock and of course are spreading false information about the company. Price is 19.

6) Forward Industries (FORD) – Tiny micro cap makes cases for cellular phones and other products. Pros: Earnings will be up more than 50% in ’05 and P/E is 10. Company is debt free and has nearly 1 dollar per share in cash. No analysts follow the company. No institutions own any shares and insiders own 20%. Cons: A large percentage of sales are with Motorola. If Motorola decides to make the cases themselves or goes with someone else it would be devastating for the company. Price is 4.

7) AMX Corp (AMXC) - Small cap company sells controllers for audio/video, climate control and communication systems. Pros: Profits will be up more than 150% in fiscal ’05 and P/E is only 12. Company is debt free and has $2 per share in cash. Insiders own 12% of stock and institutions own only 45%. Only 2 analysts follow the company. Cons: Company has mediocre long term record and the 2 analysts doubt the company will be able to continue to increase profits. Price 16.

8) Multi-Fineline Electronix (MFLX) – Small cap fast growing tech company sells electronics to wireless industry. Pros: Earnings will be up at least 30% and it sells for a P/E of 10. Company has no debt and 2 dollars per share in cash. Insiders own 75% of stock and institutions only own 15%. Only 3 analysts follow the company. Cons: Company sells 90% of its products to Motorola. If Motorola decides to make the stuff themselves or goes with someone else, it will be devastating for company. The 3 analysts that follow the company think earnings growth will slow dramatically. Company is young and has no long term track record. Price is 17.

9) Ebix (EBIX) – Micro cap Internet software maker for overseas insurance companies, primarily in India. Growth rate is 30% and P/E is 11. Company has negligible net debt. No analysts follow the company. Insiders own 65% and institutions just 3%. Company once sold for 500 dollars a share during the late ‘90s Internet bubble when it was losing money! Now that it is highly profitable, it is selling for 13. Cons: Quarterly profits are solid, but erratic. Price is 13.

10) Grill Concepts Restaurants (GRIL) - Tiny micro cap operator of 24 hotel restaurants under the names “Daily Grill” and “Grill on the Alley”. Pros: Company is a turnaround play from an accounting problem that caused results to be restated as losses. I expect company to return to profitability this quarter. Same store sales are up 4%. Company has enormous expansion possibilities over next 30 years. Company has negligible net debt. No analysts follow the company. Insiders own 35% of stock. Institutions only own 7% of stock. Cons: Earnings are seasonal and erratic. Company may not return to profitability. Restaurant industry is already oversaturated and highly competitive. Fortunes of small restaurants can change rapidly. Price is 2

11) Nature’s Sunshine Products (NATR) - Small Cap vitamin manufacturer. Pros: Earnings are soaring and P/E is 12. Company has no debt and 3 dollars per share in cash. Insiders own 25% of stock and institutions only own 45%. No analysts follow the company. Cons: Vitamins are a no growth industry so it must beat its competition to succeed. Price is 20.

12) Express Jet/Continental Express (XJT) – Small cap but rapidly expanding regional airline spun off from parent company Continental Airlines. Company has a fleet of 235 planes. Pros: Profits soared for the 4th year in a row in ‘04. Profits will be up 15% in ’05. PE is 5. Despite increasing its fleet and number of routes, company is rapidly increasing cash in bank and paying down debt. Company now has negligible net debt which is unprecedented for the airline industry. While the majors are losing money by the billions and are facing bankruptcy, this company’s profits keep rising. The lower fuel costs in ’05 should provide an extra boost to earnings. The company just signed long term contracts with all its unions so it won’t face the never ending labor woes that plague most airlines. Analysts universally hate the company which is a huge positive and they wrongly keep predicting lower profits. One analyst just last week downgraded the stock based on “valuation”. Yes, a P/E of 5 is really scary (laugh)! Cons: Airlines are cyclical and the cycles are extremely difficult to predict. Industry is a no growth industry. Continental still owns 31% of shares so this “overhang” could depress stock if Continental decides to sell their shares. Also, in the highly unlikely event Continental goes under completely and ceases operations it would be a devastating blow to this company since their regional routes feed Continental’s long distance routes. Price is 12.

13) Orbit/FR (OBFR.BB) – Tiny micro cap manufactures microwave test and measuring equipment and trades on the NASDAQ Bulletin Board. Pros: After 6 consecutive years of losses (this company is a survivor!!), the company returned solidly to profitability in ’04. Profits will be up at least 50% in ’05 and P/E is 5. No analysts follow the company. No institutions own any shares and insiders own 60% of shares. Cons: Company has a terrible long term record. Quarterly earnings can be erratic. Stock is wildly volatile and not for nervous or impatient investors. Trades on the Bulletin Board, so they will stiff you on the Bid/Ask spread getting in and getting out. Price is 1.

14) Ezcorp (EZPW) – Small cap company operates 300 pawn shops in 11 states. Pros: Company says profits will be up over 40% in ’05 and P/E is 13. Company has negligible net debt. Company has big expansion plans and enormous expansion possibilities over the next 20 years. Company is also expanding into England. Only one analyst follows the company. Insiders own 25% of shares. Cons: Pawn industry is extremely sensitive to the overall economy. People who cater to pawn shops are the first to fall off the cliff when recession hits. Don’t be in this stock when the next recession hits. Price is 13.

15) Micron Technology (MU) – Large cap cyclical memory device manufacturer. Pros: Company has returned to profitability and just reported it highest quarterly profit in 4 years, yet stock is 90% off its high. Company has over 1 billion in cash and more cash than debt and reduced its debt by 200 million in the latest quarter. Company is a proven long term survivor in a 4 company oligarchy versus 2 government subsidized South Korean companies and 1 government subsidized German “competitor”. Without the subsidies Micron would bury the competition. Insiders own 12% of stock which is phenomenal considering the size of the company. If tech spending rebounds, company will be a multibagger in less than 12 months. Cons: Institutions own 88% of shares and 25 analysts follow the company. The 4 company oligarchy are fighting an endless price war and the South Korean government won’t allow their two companies follow their natural destiny to bankruptcy. If tech spending doesn’t increase, stock could go sideways for years. Price is 11.

16) Champps Entertainment Restaurant (CMPP) – Small cap company has 65 Yuppie restaurants in 22 states. Company hopes to expand to over 1500 restaurants over the next 30 years. Pros: Earnings are expected to be up 30% and P/E is only 12. Same restaurant sales were are up 4% in the last quarter. Net long term debt has fallen sharply to $1 per share. Insiders own 25% of shares. Cons: Institutions own 80% of shares. Large percentage of sales are from alcohol and such places can go from hot spots to cold spots quickly. Price is 8.

17) Landry’s Seafood Restaurant (LNY) – Mid cap company operates more than 300 seafood and other restaurants under names such as Landry’s, Joe’s Crab Shack, Rainforest Cafe, Chart House, Saltgrass Steakhouse and others. Hopes to expand to 700 restaurants over the next 10 years. Pros: Growth rate is over 20% and PE is 11. Insiders own 17% of stock. Cons: Company has 10 dollars per share in debt. Same store sales are flat. Larger competitor Red Lobster keeps initiating a price war. Institutions own 87% of stock. Price is 28.

18) Encore Wire Corp (WIRE) - Small cap cyclical company engaged in the mundane business of manufacturing copper wire. Pros: Company is solidly profitable with the strong economy. PE is 9. Insiders are buying like crazy with several directors buying hundreds of thousands of dollars worth of stock in the past 6 months. Boring nature of business keeps new competitors away. Company emerged from recession with much higher market share and easily manageable debt of 3 dollars per share. Only 1 analyst follows company. Insiders have boosted ownership to 30% of stock and institutions own only 30% of stock. Cons: Company is in a no growth industry. Copper prices have been swinging wildly in the past 8 months so profits swings have been just as wild so profits are impossible to predict. Industry is cyclical, so if you are still in stock when next recession hits, you will lose 50-80% of your gains in short order. Price is 12.

19) Boston Scientific (BSX) – Large cap Blue Chip company manufactures medical devices and specializes in coronary stents. Pros: Profits will be up 35% in ’05 and P/E is 16. After being wildly overpriced for years, the stock is now the cheapest it has ever been. Analysts hate the company which is a huge positive. Company has 2.2 billion in cash and more cash than debt. Insiders own 33% of stock which is phenomenal for such large company. JNJ just bought Guidant which effectively reduces the stent market from a 3 company oligarchy to a 2 company duopoly which should be a positive. Cons: Nearly 30 analysts follow the company. Price is 35.

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21) Netgear (NTGR) – Small cap company sells wireless entertainment/computer peripheral equipment to home users and small businesses. Pros: Profits are expected to be up 40% and P/E is 16 times ’05 projections. Company has no debt and large 4 dollar per share cash horde. Insiders own 25% of shares. Cons: Eleven analysts follow the company. Company’s success is likely to draw lots of competitors as always happens in high tech. Institutions own 75% of stock. Price is 16.

22) Novellus (NVLS) – Large cap cyclical semi equipment manufacturer. Pros: Profits are soaring but stock is down 65% from its high. Company is debt free and has 5 dollars per share in cash. Company has tremendous long term record of out performing almost all competitors in every up/down cycle. If tech spending comes back, it will be a multibagger in less than 12 months. Cons: Insiders own less than 1% of stock. Institutions own 82% of stock and more than 25 analysts follow the company. If tech spending doesn’t come back, the stock will go nowhere or down. Price is 26.

23) Ark Restaurants (ARKR) – Small cap company operates 48 restaurants in or near hotels. Pros: Earnings were up 70% in ’04 and P/E is 13. Company is debt free and has $1 per share in cash. Same Store Sales are up 16%. No analysts follow the company. Insiders own 38% of stock. Institutions own only 11% of stock. Company has huge expansion possibilities. Cons: Company has mediocre long term record and is heavily reliant on the strength of the tourist industry. Price is 29.

24) Helen of Troy (HELE) – Mid cap manufacturer and wholesaler of vast array of hair care products including hair dryers, combs and shampoos. Pros: Fiscal ’05 earnings will be up 20% and PE is 11. Earnings have tripled over the past 3 years. Company has negligible net debt. Insiders own 24% of stock. Company is buying back their own shares. Cons: The WSJ’s Barons magazine has spread false rumors of accounting irregularities because they are angry that they pay very little in taxes because company has headquarters in Bermuda like Tyco. Price is 31.

25) Stage Stores (STGS) – Mid cap retailer operates 540 family clothing stores in rural areas in 29 states in the South and Midwest under the names Stage, Bealls, Palasis Royal and Peebles. Pros: Growth rate is 20% and P/E is 12. Company has negligible net debt of 1 dollar per share. November same store sales were up 6%. Company opened 22 new stores in ’04 and plans to open 25 in ’05 and has half the nation to expand to over the next 15 years. Company is buying back their shares. Cons: Insiders own no stock. Institutions own 95% of stock. Price is 40.

26) Diodes (DIOD) – Small cap cyclical manufacturer of semiconductors. Pro: Profits are exploding and company is the only high tech company of any kind that has not been affected by the current tech spending downturn. Company has never had a year in which they recorded a loss which is unprecedented in the semi industry. Company has tremendous long term record of gaining market share in every up/down cycle. P/E is 10. Company has net cash of 1 dollar per share. Insiders own 35% of stock and institutions only own 45%. Talented CEO Mr. Chen is well connected in Silicon Valley, Taiwan and Red China with plants in all locations and sales worldwide. Cons: Company operates in notoriously cyclical industry. Price is 25.

27) American Eagle Outfitters (AEOS) – Mid cap clothing retailer geared to teen market. Operates 850 stores. Earnings more than doubled in ’04 and are expected to be up another 20% in ’05 and P/E is 15. Company is debt free and has 6 dollars per share in cash. Pays a dividend yielding 0.6%. Same store sales are soaring. Insiders own 20% of shares. Just sold its money losing Canadian operation. Cons: Nearly 30 analysts follow the company. Institutions own 78% of shares. Fastest growth rate of company is probably in the past. Company operates in fickle teen market against many tough competitors. Price is 46.

28) Calamos Asset Management (CLMS) – Small cap mutual fund company had its IPO in November of ’04. Revenues and profits both more than doubled in ’04 after tripling in ‘03. Their mutual funds have the best 10 year record of all mutual funds, so the money will continue to pour in during ’05. Peter Lynch says if you find a good mutual fund, don’t put your money in the fund, buy stock in the company that manages the fund. No analysts follow the company. Institutions don’t own any shares. Insiders own 22% of shares. Cons: Since the company just came public, we won’t have a good feel for the stock’s valuation until its first earnings report is released in early Feb of ’05. Price is 25.

29) Fremont General Corp (FMT) – Mid cap sub-prime residential lender operates nationwide. Pros: Profits were up more than 60% in ’04 and are expected to be up another 15% in ’05. P/E is 4. Non paying loans are only 1.6% and falling, exceptionally low for a sub-prime lender. Insiders own 19% of stock. Only 1 analyst follows the company. Pays a dividend yielding 1.2%. Company is actually less sensitive to interest rates than conventional lenders. Cons: Company is extremely sensitive to the overall economy as these are the first people to default on their mortgages. Don’t get caught in this stock when the next recession hits as it will be a fast hard fall. Price is 24.

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31) Siliconix (SILI) – Mid cap cyclical technology company sells an array of semiconductor products. Pros: Company is highly profitable but stock price is down 85% from its high. Company has no debt and massive $11 per share in cash. Vishay (VSH) owns 80% of stock. Institutions own only 15%. Only 1 analyst follows the company. Cons: If tech spending doesn’t rebound, stock will go nowhere or down. Price is 35.

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33) Joseph A. Banks Stores (JOSB) – Small cap retailer of men’s suits. Company operates 270 stores and plans to expand to over 600 stores over the next 5 years. Earnings were up 50% in ’04 and are expected to rise another 22% in ‘05. PE is 13. Same store sales are up 4.6%. Insiders own 12% of stock. Cons: Company may be expanding too rapidly and has recently started taking on debt ($3 per share). Short sellers control 40% of stock and are of course spreading false rumors about the company. CEO blew off an interview with the editor of Barron’s Magazine, Alan Abelson, and Barron’s periodically publishes negative articles about company. Despite doing something as conservative as selling men’s suits, stock will be extremely volatile due to short sellers and Abelson’s vendetta against the company. Short sellers always manipulate the stock to plunge the day of earnings announcements even on great news. Price is 28.

34) Central Pet and Garden (CENT) – Mid Cap wholesaler of garden and pet supplies. Company says earnings will be up 25% in ’05 and P/E is 16. Insiders own 21% of stock. Cons: Company has huge debt load of 14 dollars per share. Institutions own 83% of stock. Earnings are highly seasonal and affected by weather conditions and are therefore tough to predict. Price is 40.

35) National Semiconductor (NSM) – Large cap cyclical technology company that manufactures an array of semiconductors. Pros: Profits are solid and stock price is down 65% from its high. PE is 20. Company has negligible debt and a nearly 1 billion dollar cash horde. Miraculously emerged from last recession financially stronger than any point in company’s 40 year history. Was one of the first chip companies to return to profitability this cycle. Company historically trades at a PE in excess of 40 during economic booms. Insiders are buying stock. Company pays a small dividend yielding 0.5%. If tech spending rebounds, stock will be a multibagger in less than 12 months. Cons: 20 analysts follow company. Mutual funds own 82% of shares. Company operates in a highly cutthroat price deflation industry. Industry is highly cyclical. If tech spending doesn’t rebound, stock will go no where or down. Price is 17.

36) Catalyst Semiconductor (CATS) – Small cap cyclical tech company manufactures semiconductors. Pros: Company is profitable and P/E is 16. Stock is down 55% from its high. Company is debt free. Company has massive cash horde of 3 dollars per share. Only 2 analysts follow the stock. Cons: Company competes in cutthroat industry with many larger competitors. Insiders only own 4% of stock. If tech spending doesn’t rebound, stock will go nowhere or down. Price is 5.

37) United Defense Industries (UDI) – Mid cap defense contractor diversified over many sectors of defense industry including combat vehicles, artillery, naval guns, missile systems, munitions and non-nuclear naval ship repair. Pros: Earnings were up 31% in ’04 and are expected to be up another 22% in ’05 and PE is 11. Has significantly increased cash and reduced debt the past 2 year and now has only 3 dollars per share in net debt. Insiders own 50%. Defense spending is increasing. Diversified and large backlog. Company provides earnings guidance significantly below what they are actually going to earn. Cons: Analysts think profits will decline. Like all defense contractors, at the whim of politics in getting contracts. Price is 47.

38) Acme United (ACU) – Micro cap manufacturer of cutting and measuring devices. Pros: Profits nearly tripled in ’04 and are expected to be up another 20% in ’05 and P/E is 13. Despite several acquisitions, company has negligible net debt. No analysts follow the company. Institutions own only 9% of shares. Insiders own 12% of shares. Pays a dividend yielding 0.6%. Company is buying back their own shares. Cons: Company operates in a no growth industry so it needs to continue to be successful in acquisitions to be able to continue to increase profits. Price is 13.

39) Casa Mexican Restaurants (CASA) – Tiny Micro cap company operates nearly 100 Mexican Restaurants in 4 states. Pros: Company has turned around and now profits are exploding and P/E is 10. Same stores sales are up 4%. Company has entire nation to expand to. Insiders own 45% of stock. Institutions own only 30% of stock. No analysts follow the company. Cons: Heavy debt load of $2 per share means a couple of missteps and company could be in trouble. Long term record is poor. Price is 8.

40) Cendant Corporation (CD) – Large cap company is largest real estate and travel company in the world. Owns Century 21, Caldwell Bankers, ERA and others, owns Ramada Inn, Days Inn, Holiday Inn, Howard Johnson’s, Super 8, Amerihost and many others including time share properties, owns Avis and Budget and owns largest travel reservation agency in the world including Orbitz, Cheapticket.com, Galileo, Thor, Travelwise and many more. Just purchased the largest airline reservation company (Orbitz). Pros: Earnings were up 21% in ’04 and PE is 12. Market leader in 5 different industries. Travel/hotel industry is starting to show significant improvement. Has completely paid off a 3.7 billion dollar fraud settlement. Earnings should increase dramatically over the next several years as it digests it recent acquisitions. Pays a dividend yielding 1.7%. Company is buying back their own stock. Cons: Earnings may temporarily decline in ’05 due to recent acquisitions before sharply rising in ’06. Fairly large debt load. Sensitive to a downturn in economy, especially real estate. Institutions own 79% of stock. Company was involved in one of the largest corporate fraud cases ever and paid 3.7 billion settlement. Investors are wary of company. Price is 22.

41) CKE (Hardees & Carl Jr.) Restaurants (CKR) – Mid cap company operates 3200 fast food joints in 44 states. Pros: Company has completely turned around with the introduction of their new super high calorie burgers. They offer a 2000 calorie Monster Burger that has 4 times the calories of a Big Mac and a 1000 calorie breakfast burger with a ¼ pound beef patty, two eggs, hash brown, bacon and cheese to cater to the growing number of obese Americans. Profits soared in ’04 after a break even ’03. Profits are expected to rise another 20-30% in ’05 and P/E is 16. Company is paying down debt. Same store sales are up 6%. Insiders own 10% of stock. Cons: Company has terrible long term record. Mismanagement over the years has led to a large 5 dollar per share debt load. With the heavy debt load the company can only expand slowly. Liberals are furious about the new super high calorie burgers and want the government to ban them. Price is 14.

42) Yellow Roadway Corp (YELL) – Mid cap company is the second largest trucker and owns Yellow, Roadway and New Penn. Pros: Earnings nearly doubled in ’04 and are expected to rise another 20-25% in ’05 and P/E is 11. Company has paid down nearly 200 million in debt in the past year. Insiders own 21% of stock. Cons: Has large debt load of 13 dollars per share. Institutions own 79% of stock. Truckers are cyclical and extremely sensitive to the overall economy. Don’t get caught holding this stock when the next recession hits. Price is 55.

43) Greg Manning Auctions (GMAI) – Small cap wheeler dealer outfit that runs the gamut from major international auctions of priceless paintings, coins, stamps and cards to local flee markets and everything in between. Greg does both Internet and traditional style auctions. Pros: Profits nearly tripled in fiscal ’04 and will be up at least another 20% in fiscal ‘05 and PE is 10. Company has more cash than its negligible debt. Company has successfully expanded into Europe and South America and recently Asia. Only 2 analysts follow the company. Insiders own 75% of shares. Institutions own only 11% of shares. Cons: Greg is giving himself and other company officials too many options which are diluting existing shares. The auction business is cyclical and the cycles are tough to predict. Short sellers own one third of all shares not owned by insiders and hedge fund managers who are shorting the stock are using the WSJ’s Baron’s Magazine to spread bogus information about the company. Price is 11.

44) Sports Chalet Stores (SPCH) – Small cap sporting goods retailer operates 35 stores in California and Nevada. Differentiates itself by offering Ski and Scuba Diving equipment for rent. Pros: Earnings expected to be up approximately 30% and PE is 14. Company is debt free. Same store sales increased by 6%. Company has the entire nation to expand. Insiders own 72% of stock. Institutions only own 10% of stock. Only one analyst follows the company. Cons: There are scores of sporting goods chains also trying to expand and they are all larger than company. Company has inconsistent record at increasing earnings. Price is 13.

45) CCA Industries (CAW) – Small cap company sells over the counter consumer health and beauty aids targeted at less sophisticated consumers. Company has over 100 products. They specialize in cold remedies, hair removal products and wrinkle removal products. Pros: Company has doubled profits in past 2 years. Earnings for ’05 will be up approximately 20% and PE is 12. Company has no debt and 2 dollar per share in cash. Earnings have increased dramatically 5 years in a row. Pays a dividend yielding 1.3%. Insiders own 35% of stock. Institutions only own 15% of stock. Cons: Quarterly earnings are erratic due to the way the company expenses its TV advertising. Company is very small and can afford only 15 second ads slots on TV. If you blink you miss the ads. Price is 8.

46 ) Orleans Homebuilders (OHB) – Small cap regional homebuilder in the Mid Atlantic region. Pros: Company says earnings will be up more than 30% in fiscal ’05 and P/E is 6. Insiders are buying. Insiders own 75% and institutions only own 20% of stock. Cons: We are probably in the late innings of the housing boom. Company has huge debt load of 17 dollars per share. If recession hits, company could go under completely. Price is 18.

47) Aeropostale Stores (ARO) – Mid cap retailer of teens clothing operates 550 stores. Pros: Earnings were up more than 50% in ’04 and are expected to rise at least another 20% in ’05 and PE is 16. Same store sales are soaring. Company has no debt and 2 dollars per share in cash. They plan to expand to over 1000 stores over the next 4-5 years. Insiders own 7% of shares. Cons: Company competes with fellow teen retailers Abercrombie and Fitch (the porn peddlers), Hot Topic, American Eagle Outfitters, Wet Seal and Urban Outfitters. All are trying to conquer the whole teen market and not all of them will win. Institutions own 93% of shares. More than 15 analysts cover the company. Price is 29.

48) Genzyme (GENZ) – Large cap biotechnology drug company. Pros: Earnings in ’05 will be up 20-25% and P/E is 25. Company’s rich pipeline is going to allow them to sustain this earnings growth rate for many years to come. Company has negligible net debt. Insiders own 10% of stock. Company has tremendous long term record. Cons: Stock is not cheap. Institutions own 90% of shares. Over 20 analysts follow the company. Price is 56.

49) Metrological Instrument Scanners (MTLG) – Small cap maker of bar codes and scanners used in retail and other applications. Pros: Earnings to be up 20-25% in ’05 and P/E is 20. Company is debt free and has 2 dollars per share in cash. Insiders own 50% and institutions only own 38% of stock. Cons: Then next two quarters have tough comparisons to last year and earnings will be flat. Stock is not real cheap. Price is 20.

50) Fedex (FDX) – Large cap company provides air and ground delivery services for individuals and corporations. Pros: Earnings are soaring with the increase in Internet purchases. Earnings in fiscal ’05 will be up over 40% and P/E is 19. Insiders own 8% of shares which is phenomenal for a large cap company. Company has a tremendous long term record. Pays a small dividend yielding 0.3%. Cons: Growth rate will probably slow. Institutions own 76% of shares and 17 analysts follow the company. Price is 98.

51) Atrium Corp (ATRM) – Micro cap Semi equipment manufacturer. Company is profitable and P/E is less than 10. Company has no debt and 1 dollar per share in cash. Only 1 analyst follows the company. Institutions only own 17% of shares. Cons: Insiders only own 2% of stock. Like all tech companies, it faces ferocious competition and if tech spending doesn’t increase, the stock will go nowhere or down. Price is 3.

52) Finish Line (FINL) – Mid cap retailer of athletic shoes and apparel operates 550 stores. Growth rate is 15 and P/E is 13. Company is debt free and has large cash horde of $3 dollars per share. Pays a dividend yielding 0.6%. Insiders own 7% of shares. Same store sales are up 10%. Cons: Institutions own 83% of shares. Fastest growth rate of company is probably in the past. Price is 17.

53) Guitar Centers (GTRC) – Mid cap retailer of musical equipment with 160 stores. Pros: Earnings in ’04 increased more than 50% and are expected to rise another 20% in ’05 and P/E is 17. Company has plenty of expansion room the next 10 years. Same store sales are up 10%. Company has a low 3 dollars per share in net debt. A key insider was buying heavily in late November. Insiders own 25% of stock. Company competes only against mom & pops stores. Cons: Institutions own 75% of stock. Price is 51.

54) Central European Distributors (CEDC) – Small cap company imports brand name beer, wine and spirits into Poland. Pros: Company says earnings will be up at least 22% in ’05 and PE is 19. Company is nearly debt free and has more cash than debt. They are blowing away local competitors because population wants Western brands. Insiders own 22% of stock. Only 3 analysts cover the company. Plans to expand into other Central European countries and into other products. Cons: Operating in a foreign country, the government is always a threat. New competitors could emerge. Price is 30.

55) Countrywide Credit (CFC) – Large cap Blue Chip size company is the largest company in the nation focusing on home mortgages. Pros: Despite end of refinancing boom, company says it will earn $3.75 per share in ’05 and PE is 9. Market leader. Has gained market share through every up/down cycle the past 30 years. Stock is under priced because investors have already factored in the end of the housing/refinance boom. Company pays a dividend yielding 1.3%. Cons: Sensitive to interest rates and housing market. Institutions own 90% of stock. More than 20 analysts follow the company. Price is 36.

56) Roanoke Electric Steel (RESC) – Small cap cyclical company produces steel out of scrap metal in Deliverance Country (WV). Pros: With the strong economy profits are soaring and P/E is 6, one of the lowest in the steel industry. Company has paid down debt many years in a row and now has only 3 dollars per share in debt with one of the lowest debt to equity ratios in the steel industry. No analysts follow the company. Insiders own 9% of stock. Institutions only own 42% of stock. Pays a dividend yielding 2.1%. Cons: We may be in the late innings in the steel cycle. Price is 21.

57) Conns (CONN) – Small cap retailer of appliances and consumer electronics operates 50 stores in Texas and Louisiana. Pros: Profits for ’05 are expected to be up 15% and P/E is 11. Same store sales are up 4%. Company has negligible net debt. Company has 48 states and 20 to 30 years of expansion ahead of them. Company has niche of being the only company that provides in-house loans to consumers. Insiders own 72% of stock. Institutions only own 20% of stock. Only 1 analyst follows the company. Cons: Company faces ferocious competition from goliaths Best Buy and Circuit City. Their in- house loans could be a liability in a recession. Price is 16.

58) Pfizer (PFE) – Large cap Blue Chip is one of the largest companies of any kind in the world and the world’s largest drug company. Pros: Despite a plethora of bad news including the Celebrex scare and several looming patent expirations, earnings will actually be up slightly in ’05 and P/E is 11. Company has by far the richest and most promising drug pipeline in the industry and if you can get past ’05, the future is very bright. Stock price is now lower than it was 8 years ago and earning have more than quadrupled during that time frame. Stock has gone from the most overpriced stock in the S&P 500 to one of the cheapest. Company has increased profits every year since the early 1960s. Company pays a dividend yielding 3.0% and has raised the dividend 38 years in a row. For the past 25 years company has had the most successful internal drug development program in the industry. Cons: Celebrex sales will decline and worse still, the drug could be banned by the FDA resulting in a 15% drop in profits. Three of its top 10 drug patents will expire in ’05. Do you have the stomach to survive the non-stop ugly headline stories you will hear over and over again about Celebrex and the patent expirations in ’05? Nearly 30 analysts follow the company. Price is 26.

59) Leadis Technology (LDIS) – Small cap cyclical tech company manufactures semiconductors. Pros: Company is profitable and P/E is 11. Stock is down 40% from its May 2004 IPO. Company is debt free. Company has massive cash horde of 4 dollars per share. Insiders own 40% of stock and institutions own only 20% of stock. Cons: Company competes in cutthroat industry with many larger competitors. If tech spending doesn’t rebound, stock will go nowhere or down. Stock is wildly volatile. Price is 10.

60) Chico’s Fas Stores (CHS) – Large cap retailer operates 650 women’s clothing stores with 500 high end Chico’s stores and 150 of their newer moderate priced White House/Black Market stores. Pros: Earnings are expected to be up 25% in ’05 on top of a staggering 7 fold increase just 4 years and P/E is 23. Despite massive expansion, company remains debt free and has 3 dollars per share in cash. Newer concept White House/Black Market can be the future driver of growth. Cons: The Chico’s concept is nearly saturated so they will have to rely on White House/Black Market concept for future expansion. Insiders only own 3% of stock. Institutions own 95% of stock. Nearly 20 analysts follow the company. Price is 45.

61) Parlex Fragrances (PARL) - Small cap manufacturer of perfume. Pros: Earnings will be up more than 50% in fiscal ’05 and P/E is 23. Company has no debt and 1 dollar per share in cash. Company has major share buyback plan underway and has been the largest buyback firm in the US stock market, buying back more than 50% of shares outstanding which is unprecedented. Insiders own 13% of stock and institutions own only 37%. No analysts follow the company. Teen girls are wearing perfume for the first time since the early 90s Grunge era. Company has signed 3 major new marketing deals with Guess and teen idols Paris Hilton and Andy Roderick. Cons: Very competitive industry and company has a mediocre long term record. Stock is no longer dirt cheap. Price is 23.

62) Bank of America (BAC) – Large cap Blue Chip is the largest bank in America and one of the largest companies in the world. Pros: Earnings will be up at least 10% in ’05 and P/E is 10. Pays a dividend yielding 4.0%. Non paying loans are a miniscule 0.6% and falling. Company has an asset to equity ratio of 9.2, the highest of all major banks. Company just completed the successful acquisition of Fleet and has tremendous long term acquisition record of smaller banks. Company has historically increased profits even when interest rates were rising. Cons: Company’s size will prevent it from ever growing earnings faster than the low teens. More than 25 analysts follow the company. Bank stocks plunge during recessions so make sure you bail before the next recession. Price is 46.

I also own the following stocks, but I am less excited about their price appreciation potential as they have gone up too much:

Dialysis Centers of America, Nam Tai Electronics, Cost-U-Less Stores, Red Robin Gourmet Burgers, Union Bank of California, Regis Hair Saloons, Western Digital Hard Drives, Buffalo Wild Wings Restaurants, Moog Actuators, Quality Systems Software, Whirlpool, Tyco International, Yum brands (Pizza Hut, Taco Bell, KFC), News Corp (Fox), Juniper Networks, Softbrands Software.

Is it too late to jump in on apple? Same goes for the sattelite radio companies...Do you think it's too late to jump in on those?

Nice compilation Molvar, I'll have to do some looking into a few of those companies.

I don't like the satelite companies too much, they are years away from profitablility, and have issued an enormous amount of stock to make their debt payments. I think they'll act alot like Lucent (LU)...Even when they make money, they'll be so much in the hole investors won't care and the stock won't move much. Besides, digital radio will start becoming available in the next few years, with sound quality the same of satallite, and free, people might not be willing to pay for subscription service.

BTW, just because a company is a pioneer in an emerging industry does not ensure future success, many times it's the companies that come along later and perfect the products...at a much lower cost.

Thanks for that comprehensive round-up John. You've got some really interesting ideas in there and you've obviously done a lot of research.

If I had to play devil's advocate, I would say that fundamental are great but unless the market wakes up to your genius you can really waste a lot of time by tying up your capital in all the wrong places. Some of the charts on those companies you list are real dogs. Came down from lofty heights, are still down and appear to be going only lower. Some of them appear to be breaking out now which is great.

Not trying to put you down in any way. Just food for thought for the others. You're obviously a bright guy and you've done your homework. All the best to you...

Hi Ah ho,

You are obviously an IBD guy. I have subscribed to IBD for 17 years. It is a great newspaper, but the system he is pushing sells a lot of newspapers but won't get you rich.

I am expert on his system and have studied it intently for 17 years and it is a bunch of BS.

Stick to the fundamentals like Peter Lynch and the charts will take care of themselves. In the long run stocks follow earnings. From 1958 to 1990 Coke increased their profits 30 fold. During that same time frame the stock went up exaclty 30 fold. US steel earned the same amount in 1958 as it did in 1990 and the stock sold for the same price in 1990 as it did in 1958. That is all there is to it. You could have wasted half a lifetime studying "market price/volume action", the put/call ratio, "comfirmed rallies 4-7 days after the first rally", "3-4 distribution days with a few weeks", "cup with handle patterns", and you would have wasted your time and money.

Take it from someone who is an expert on Bill O'Neil's CANSLIM system and who has watched and remembered everything O'Neil's people wrote in IBD the past 17 years. It works as often as it doesn't work, meaning it is worthless.

Even when it works, it will always be short term gain (less than one year holding period) and you will be taxed at the maximum rate and taxes are the number one obstacle to wealth creation. If you own a big winner like Chicos for 10 years and you didn't sell. You paid ZERO taxes.

Of course the CANSLIM sells a lot of newspapers. Note however that IBD readership has stagnated over the past 8 years. That means for every new person sold on O'Neil's CANSLIM such as you, there is another who followed it and lost and eventually gave up.

Even if his system actually worked more than 50% of the time, it would not work for long because once everyone started playing his game it would fail because everyone would be trying to get in at the "pivot point" and everyone would be trying to get out at the same time so it mathematically would fail like a pyrimid scheme will always fail. Throughout 2004, his writers kept lamenting on how the rules weren't working as well as he wished the would.

CANSLIM tries to make investing a silly game of silly rules. Investing is not a game, it is ownership in a corporation and the key is to buy ownership in a company that is undervalued compared to is future earnings prospects. It is not a game of trying to buy a stock when the chart pattern looks like a cup with a handle and it passes its "pivot point".

Stick to the fudamentals, stay fully invested in stocks at all times and in stocks that are cheaply priced relative to their earnings prospects and stay with the stock until the fundamentals fall apart or the stock gets wildly overpriced, never look at a chart, ignore what the market is doing, ignore what the analysts are saying, ingnore all economic and market forecasts, ignore what IBD is saying about "the health of the market", ignore the price of oil, ignore what the Mainstream Media is telling you about trade deficits and budget deficits, ignore everything the Fed does and and everything idiot Greenspan says and predicts and focus on only the fundamentals of the companies you own or are thinking of buying and you will grow rich over time.

Interesting. Do you invest 100% of your holdings in stocks? No bonds, no cash? Real Estate? A friend of mine is a fully invested Value investor and keeps a slight cash stash. No bonds. He and I are also in our mid to late 30's - nowhere near retirement. He's been trying to get me out of bonds but my preference is to keep slight diversification in my personal and retirement holdings.

I do own a house, but I am 99.6% invested in stocks and 0.4% in cash and nothing in bonds. Here is the long term annual rate of return for the various investment classes since 1926:

Stocks 10%

Real Estate 7%

Bonds 5%

Money Market (cash) 3%

Inflation 3%