don barrett

Cal-Maine Foods

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I got my portfolio lined out today and I'm ready to rock and roll! It took me so long to get underway I didn,t have time to enter my data on my stocks. Maybe I will find out how to add my
thoughts later.
My best stock of today was Cal-Maine Foods. I have owned this stock in the past and I love the company.
CALM is a one stop shop for something most of us use daily-eggs. Not real exciting,but Calm is the King off eggs and they are involved from raising the chicks to becoming laying hens,distribution and even grow some of their feed. The 2 main brands they distribute under are EggLandsBest and Farmhouse. Still not excited? Lets dig a little deeper.
CALM had sales of $ 223 million for the 2nd quarter of 2008 compared to $137 miilion in the 2nd quarter 2007. Calm reported net income for 2nd quarter 2008 of $40.2 or $1.70 per share compared to $6.4 million or .27 cents for same quarter 2007. CALM netted $2.46 for first half of 2008 and they expect to continue with this kind of profit. Looking forward CALM has a P/E of about 6. Not bad.
As I said earlier CALM was my best stock today and gained close to 10%. Apple someone said,I,d rather have eggs!!
Peace,
Don

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WH

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WH is a company located in China and manufactures and markets steel tubing used in the oil and natural gas exploration.
WH went public in December 2007 with 25 million shares issued at $8.50 raising $213 million. Wh went public in 2007 ,but they have been in business since 1999 and thus have a seasoned work force in place and this company will hit the ground running. WH had sales of over $366 million in 2006 and should show improvement in 2007. With the $213 million raised in their IPO in 2007 ,WH should have a great 2008.
If you look at WHs potential earnings for 2008,the company is a steal at @8.50 a share.

Don

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DryShips-Full Steam Ahead

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DryShips Inc. is a marine transportation company operating about 30 vessels. Thecompany reported in November 2007 for the 3rd quarter net income of $103.5 million or $2.92 per share which included a one time capital gain of $19.2 million or .54cents on the sale of 2 ships. Excluding the 1 time capital of .54 cents,they still netted $2.48 a share. At $73 dollars that gives them a current p/e of about 7.
Shipping rates are dictated by the Baltic Dry Index or BDI as set by the Baltic Exchange in London. The BDI spiked from about 4300 in January 2007 to about 10,800 in October 2008.
If you examine the costs of operating an ocean vessel,you have labor and fuel costs. Labor should be fairly stable and that leaves fuel costs. Fuel costs have sky rocketed,but companies such as DryShips have a built in fuel surcharge rate which increases as fuel costs rise. The trucking industry in the U.S. operates in the same fashion,as fuels cost go up,the shipper pays a higher surcharge and absorbs the higher cost,not the transportation company. So,as BDI more than doubled,DryShips and the other ships company's costs hardly moved and thus they had a great 2007. Drys and others are buying ships and consolidating because the industry is booming. The BDI has dropped off to about about 5500 and now is starting to increase again.
A lot of these ships are hauling coal and agriculture products from the U.S. to China. As the dollar weakens,shipments from the U.S will continue to grow. I have seen estimates as high as a full 1% of the U.S. GDP is now coming from exports. As we open new export markets and we have a weak dollar,these marine transport companies should continue to grow.
Based on current BDI rates and comparing those current rates to past rates,the marine shipping industry is doing very well. This is one major factor in my predicting this is a slow down and will not be anything near the 2000-2003 recession.
Drys and these other transporters are in a great position and I think are a great buy at current price levels.

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