October 2007 Archives (John Czerw)

October 2007 Archives

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NIHD is down about 7% today on higher than usual volume. I've not seen any definitive information for such a decline. The fundamentals for the company remain the same - strong! I am, therefore, taking the last few thousand dollars in my account and buying NIHD.

Handicapping the Strategy Lab Open

Rating: 1.64 (11 votes) Vote:

In addition to stock selecting, I also enjoy handicapping horse races. Tonight I got out my Daily Racing Form and reviewed the past performances of some of our most promising contestants.

I believe that the judges will need to pick someone who finishes in the top 20. If they don't this will be a writing contest and not performance based. Here are three contestants that I believe lead the pack:

dishwaster is # 5 in total returns and off the lead by only 3%. And what a poster!!! In the top 50 posts he holds the #3, #12, #14, #17, #21 , #24, and #26 spots. That's 14% of the topt 50 posts. I make dishwasher the even money favorite to win at this point.

Behind by several lengths are gooddaze and pkauk. They are neck and neck at $12.27 and $12.26 ( positions 9 and 10). gooddaze holds the #19 favorite post and pkauk's posts hold the #33 and #49 spots.. I make them both 3-1 to win at this point.

No other top 20 contestants have top 50 posts, so I don't think they are in the running.

I'll update this analysis from time to time, when there are significant changes, if you are interested.

Good luck to all.

Did I step on a landmine with NIHD?

Rating: 1.87 (15 votes) Vote:

If you'll recall I dumped my VLO position and put it into NIHD on 9/28. I selected NIHD after completing a screen looking for higher margin, high growth stocks. NIHD was the winning candidate off that entire list of about 40 stocks. Telecom in emerging markets looked like a winner.

A few days after my initial purchase the stock price began to fall. No news was reported, so I added again. The first purchase was at 81.66, the second at 73.65. The price continued to fall.
It wasn't until Monday evening that news came that S's CEO was resigning. But so what? NIHD was spun off from S in 2003. And in the last two years NIHD has advanced 80% while S has only advanced 20%. And they are different businesses. So on 10/9 I added again at 69.86. My cost basis is now 79.63.

The interesting thing is that the price of NIHD fell from a forward PE of 22 to 19. S's forward PE is also 19. But NIHD's margins and growth rate are 12 and 40. And S's margin is less than 1 and their growth rate is low single digits. It looks to me like there was knowledge of the CEO resignation at S, prior to the announcement, and that some institutional players took the NIHD premium off the table in advance of the news.

So, did I step on a landmine? Not really. I certainly would have rather made my move a week later, but the fundamentals of NIHD remain strong and there isn't a strong linkage to S. I think
some institutions got nervous. A conference call on the 25th by NIHD should help.

So, I didn't step on a land mine, but I did stumble into a hole. VLO is up 10% since I sold it, and NIHD has fallen 10% since I bought it. The move hurt my portfolio in the short term, but I'm confident it will play out positively by the end of the competition.

Handicapping the Strategy Lab Open

Rating: 1.06 (16 votes) Vote:

With the leading NAV of $14.28 and holding 8 of the top 50 favorite posts, dishwasher is the prohibitive favorite to win the SLO. In addition he holds the top 3 favorite post positions. I make him the 4/5 favorite.

jslRA2006 and demonhawk86 have NAVs of $13.46 and $13.26. They also have posts in the top 50 favorites at spots 22 and 29. I make them 5/2 contenders.

Finally, MagickNiner and pkauk have NAVs of $12.76 and $12.69 and top 50 posts at 38 and 29. I put them at 5-1.

Once again, I think the winner will come from the top 20 NAVs and be a top post vote getter. dishwasher averages 13 votes for his top 50 posts. Few competitors hit that average, so it appears dishwasher has a fan club that will insure his standings. And of course, his stock picking ability seals the deal.

Best of luck to you all. I'll continue this handicapping update if interest appears to warrant it.

Handicapping The Strategy Lab Open

Rating: 1.13 (8 votes) Vote:

The call:

dishwasher (3/5) is in the lead with the #2 NAV and 9 (count em - 9) top 50 posts. His average vote count is 29 votes per blog post.

MagickNiner (3-1) has improved his position from last week. His NAV is #4 and he has 2 of the top 50 posts, with an average of 16 votes each.

jslRA2007(5-1) is still in the hunt with the #6 NAV and 1 top 50 post.

Finally, KC10 and pkauk (both 6-1) have NAVs # 8 and 14 respectively and each have 1 top 50 post.

Unless dishwasher falls out of the top 20 NAVs, it would appear he will be the winner. He also has a dedicated fan club for his posts. It would not surprise me if he held most of the top 50 post spots by the close of the competition.

John Czerw

jczerw

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