This is a U.S. mining company (PCU) with big operations in Peru and Mexico which plunged about 30% from a high in mid-May. Not only has it faced an inflation-triggered decline in global copper prices from $4 to $3 a pound, but the company has also been hit by labor strikes at two Mexican mines. At $75 a share, the stock trades at seven times earnings and boasts a dividend yield of 11%... For a company that is expected to boost earnings by 55 to 60 percent , that ain't an expensive stock at all.
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Ruthless trader
- Thread starter Jack Haddad MD
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Hello:
One problem with fund managers recommendations, is that we cannot know the extent of their research skills.
Also I have seen first hand the smoke screen that companies like Toll Brothers, Lennar, Centex and others can put in front of an audience.
I think there are a couple of things you can look at, since you seem to favor the fundamental side for your analysis.
For homebuilders, what is known is that access to capital is closing down. Therefore, organizations that want to continue to speculate in real estate have to firm up their lines of credit now.
What is unknown (to the public) is the whether the market offerings that they come up with will attract buyers in a slower market. For instance, Pulte through their subsidiary PulteDelWebb is looking to develop property in rural areas by building a gated environment for folks 55 and over. These properties feature smaller homes with commensurately smaller yards built around a golf course (usually with a man-made lake). In addition, they will build a Community Center that offers social programs for the residents. The homes tend to be priced at the low end of the local market. It seems to me that they have a product designed to sell to an increasingly aging population while spec home builders like Toll, Lennar, Kauffman & Broad, etc have to appeal to a more general audience.
For those reasons (and some others) I tend to like Pulte PROVIDING their subsidiary can continue to deal with the challenges they face in the production phase of their work.
In the interest of full disclosure, I am a retired fund manager (retired a little over a year ago) who did have a significant position in Pulte. The status of that position is unknown to me at this point.
Steve
One problem with fund managers recommendations, is that we cannot know the extent of their research skills.
Also I have seen first hand the smoke screen that companies like Toll Brothers, Lennar, Centex and others can put in front of an audience.
I think there are a couple of things you can look at, since you seem to favor the fundamental side for your analysis.
For homebuilders, what is known is that access to capital is closing down. Therefore, organizations that want to continue to speculate in real estate have to firm up their lines of credit now.
What is unknown (to the public) is the whether the market offerings that they come up with will attract buyers in a slower market. For instance, Pulte through their subsidiary PulteDelWebb is looking to develop property in rural areas by building a gated environment for folks 55 and over. These properties feature smaller homes with commensurately smaller yards built around a golf course (usually with a man-made lake). In addition, they will build a Community Center that offers social programs for the residents. The homes tend to be priced at the low end of the local market. It seems to me that they have a product designed to sell to an increasingly aging population while spec home builders like Toll, Lennar, Kauffman & Broad, etc have to appeal to a more general audience.
For those reasons (and some others) I tend to like Pulte PROVIDING their subsidiary can continue to deal with the challenges they face in the production phase of their work.
In the interest of full disclosure, I am a retired fund manager (retired a little over a year ago) who did have a significant position in Pulte. The status of that position is unknown to me at this point.
Steve
Quote from steve46:
Hello:
One problem with fund managers recommendations, is that we cannot know the extent of their research skills.
Also I have seen first hand the smoke screen that companies like Toll Brothers, Lennar, Centex and others can put in front of an audience.
I think there are a couple of things you can look at, since you seem to favor the fundamental side for your analysis.
For homebuilders, what is known is that access to capital is closing down. Therefore, organizations that want to continue to speculate in real estate have to firm up their lines of credit now.
What is unknown (to the public) is the whether the market offerings that they come up with will attract buyers in a slower market. For instance, Pulte through their subsidiary PulteDelWebb is looking to develop property in rural areas by building a gated environment for folks 55 and over. These properties feature smaller homes with commensurately smaller yards built around a golf course (usually with a man-made lake). In addition, they will build a Community Center that offers social programs for the residents. The homes tend to be priced at the low end of the local market. It seems to me that they have a product designed to sell to an increasingly aging population while spec home builders like Toll, Lennar, Kauffman & Broad, etc have to appeal to a more general audience.
For those reasons (and some others) I tend to like Pulte PROVIDING their subsidiary can continue to deal with the challenges they face in the production phase of their work.
In the interest of full disclosure, I am a retired fund manager (retired a little over a year ago) who did have a significant position in Pulte. The status of that position is unknown to me at this point.
Steve
Thanks, steve.
According to Justin Walters of Birinyi Associates, when the stock market (as measured by the S&P 500) rises more than 1.5% in response to a Fed announcement, it fell 10 out of 14 times the following day!
Quote from Jack Haddad, MD:
This is a U.S. mining company (PCU) with big operations in Peru and Mexico which plunged about 30% from a high in mid-May. Not only has it faced an inflation-triggered decline in global copper prices from $4 to $3 a pound, but the company has also been hit by labor strikes at two Mexican mines. At $75 a share, the stock trades at seven times earnings and boasts a dividend yield of 11%... For a company that is expected to boost earnings by 55 to 60 percent , that ain't an expensive stock at all.
On June 26 2006, CPU broke out today from a small consolidation pattern sitting on its 200-day moving average â a widely followed intermediate-term trend proxy (see Chart 4). This adds to the body of evidence that the bull market in mining stocks of all kinds is very much alive.
Folks, DRL's agreement with with Westernbank Puerto Rico will significantly decrease its financial exposure to rising interest rates, deleverage its balance sheets, and improve its capital ratios. The deal will DRL to restructure all outstanding mortgage loan sale transactions. As of May 31, the unpaid principal balance of all mortgage loans previously sold by Doral Financial to Westernbank was $954 million. Under the new agreement, Doral will transfer to Westernbank its retained interest on the mortgage loans-- which means it will no longer pay Westernbank a floating pass-through rate. They will continue to service the loans in exchange for an annual fee of 25 basis points of the unpaid principal balance of the mortgage loans. In addition, as of May 31, Doral agreed to repurchase from Westernbank at par any mortgage loans that are 90 or more days delinquent, and Westernbank agreed to terminate in full Doral's obligations under the original mortgage sale agreements.
This is a stock that I have been eyeing for approximately 1 1/2 years, since its collapse from 48. I have done quite well trading it from time to time. However, at 6.50/share, I'd like to establish a long core of 5 blocks or more. Fundamentals and management have improved significantly.
This is a stock that I have been eyeing for approximately 1 1/2 years, since its collapse from 48. I have done quite well trading it from time to time. However, at 6.50/share, I'd like to establish a long core of 5 blocks or more. Fundamentals and management have improved significantly.
Bought 1 block of 1 NEM at 54.55
Folks, today's selling reaction to N Korea is way over-blown. Technicals on the Dow are preventing the Dow from a serious re-test of the 10678 May lows. However, rising interest rates coupled with increased gas prices will dampen consumer spending this summer, unless we have a turn-around rapidly. Otherwise, consumer spending could easily influence corporate capital to cease its spending, and the end result would be a recession.
There are several indicators working in favor of the market. First, no signs of warnings from major bell weathers have emerged yet... Though this could change. Second, the rise in chip sales for the month of May by 9.4% is a welcome gesture for the technology as well as the internet sector. Technology has always been known to lead other markets!
It remains a "stock picking market" with lots of covered calls hedging opportunities. For example look at NEM at 55.10 while selling the July 55 calls at 1.65/contract. Not bad of a premium in 1.5 weeks remaining. The stock is posed to challenge the 52 week high of 62. Another one I like id YHOO; selling the July 30 calls for 3.00/contract leaves you with .40/contract in the event your shares are taken away by July expiration day. I love to catch juicy premiums! Better yet, look at TOL's July 25 calls at 1.05/contract!?
There are several indicators working in favor of the market. First, no signs of warnings from major bell weathers have emerged yet... Though this could change. Second, the rise in chip sales for the month of May by 9.4% is a welcome gesture for the technology as well as the internet sector. Technology has always been known to lead other markets!
It remains a "stock picking market" with lots of covered calls hedging opportunities. For example look at NEM at 55.10 while selling the July 55 calls at 1.65/contract. Not bad of a premium in 1.5 weeks remaining. The stock is posed to challenge the 52 week high of 62. Another one I like id YHOO; selling the July 30 calls for 3.00/contract leaves you with .40/contract in the event your shares are taken away by July expiration day. I love to catch juicy premiums! Better yet, look at TOL's July 25 calls at 1.05/contract!?
Bought 5 blocks of YHOO at 32.61 and wrote 500 July 30 calls for 3.00/contract.
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