Stock Analysis
Mailbag: The Russian Front: Oil, Putin and Prosperity
I am answering to questions about why I don't follow Russian markets, oil production and more.
The Russian Front: Oil, Putin and Prosperity
I don't follow Russian markets and recently I discovered that I don't understand the psyche of Russian people. I don't even have a decent inventory of hard liquor at home, a disgrace by any Russian standard. And please don't be misguided by my Russian first name.
Approach to risk management
To finish first, first you must finish. Thus looking down (for risk) often is more important than looking up (for return). In a long only portfolio there are three interrelated pillars to risk management: diversification, stock selection, and valuation.
Nokia poised to ring investors’ bells
Nokia is a perfect showcase for contrarian value investing. It is easy not to like Nokia stock, especially for US investors, as Nokia has not come up with a decent cell phone in the US for a while.
Small telecoms market means NZT is nearly alone in its field
The stocks of American local telephone companies are down substantially from their heyday of the late 1990s and they have been facing problems on many fronts, including fierce competition from cable operators.
The Good, the Bad and the Ugly – US Bank – 2nd Quarter 2005
The light at the end of the tunnel appears very bright for banking stocks as aging baby boomers will likely demand more of their products and services as they get deeper into the retirement stage of their lives. However, in the meantime the light is flickering somewhat as banks are going through some tough times with net interest margins under pressure due to the flattening of the yield curve.
RX – Still a Gem, Just in the Wrong Hands
A couple of days ago headlines read, "Dutch company VNU, Inc (VNUVY) announced they would buy IMS Health (RX) for $6.9 billion". However, in its press release, RX announced that it is merging with VNU. Did VNU buy RX or was it a merger?
Why I am still in love with Abbott
Abbott Labs got a less than happy round of applause Wednesday from the market even as it beat the consensus earnings number by a penny.
China Speed – Running into the Great Wall?
According to the Economist, the Chinese economy grew 9.4% in the first quarter in 2005 with industrial production being up an astounding 16%. Surprisingly most of that growth was real, as inflation was only 1.8%. It is impossible to say how accurate these numbers are, since they are put out by a very political and secretive entity - the Chinese government.
Beware the boredom of the bear market
In the last century, every prolonged bull market, which ran about 16 years, was followed by a similar length bear market. I believe this is not a random pattern. It takes a long time for an emotional cycle to reach its climax, and it takes a similar time to reverse that cycle and drive valuations to the other extreme. In a bull market rising prices intensify optimism and euphoria. The more persistent the ascent the more certain investors become of their abilities. As the perception of risk gets duller, even the most risk averse become risk seekers.
Demoting General Motors
Excellent article on General Motors (GM) in the May 9th edition of Business Week. Here are some important points and my thoughts.
The Good, The Bad, and The Ugly: Cendant
Today I discuss Cendant (CD), a company in the real estate and the travel industry, and their recent financial performance.
The Good, The Bad, and The Ugly – US Bank
This is what I want to see from a bank in our portfolios: growing assets - a source of loans, growing checking accounts - a source of free (cheap) funds, growth of fees - provides stable income, which is not sensitive to interest rate volatility.
The Good, The Bad, and The Ugly – AJ Galagher
As "the Ugly" and "the Bad" dominated the performance for Arthur J Gallagher & Co (AJG) this quarter, at least on the surface, and as such we will address them first.
Don’t compromise in investment dating game
For a company to find a place in our clients' portfolios it has to have three crucial ingredients: growth, quality and value. Not compromising, and thus avoiding marginal investments, is a true test of discipline - I would opt to hold cash over a marginal stock any time.
The Good, The Bad, and The Ugly: Kimberly Clark
Kimberly Clark (KMB) had a very positive development. However, it will take time before price increases will trickle down to KMB's bottom line, as inventory has to be worked out and contracts have to be re-written.
Abbott – Gotta Love It!
The only pharmaceutical company that we hold company wide is Abbott Labs (ABT). It has all the characteristics of the major pharmaceutical company: very strong balance sheet, great cash flows, nice fat profit margins and return on capital to die for.
Few accept slower growth gracefully
At some point even the most successful company will reach a size at which a supernormal growth rate is not possible. The law of large numbers is as inevitable as gravity, setting in slowly but surely.
Introduction to Minyanville
With this article Minyanville is proud to welcome Vitaliy Katsenelson to the 'Ville. Mr. Katsenelson holds a CFA and has worked in the asset management industry since 1995.
Bitter pill for pharmaceutical companies
In the good old days, pharmaceutical companies traded at a significant premium to the market, which was justified by predictable earnings growth, bulletproof balance sheets, Microsoft-monopoly-like profit margins and a return on investment that was the envy of corporate America. Those good old days are gone.
Future Looks Bright for Computer Associates
I'm satisfied with Computer Associates' performance in the latest quarter, plus, its organic growth numbers look good. I love companies with recurring revenues, Computer Associates has an attractive valuation, an improved corporate and financial profile - and, likely, a brighter future.
