Glen Doth Know

Looks to me like the market bottomed.

PE was roughly 7. We've had lots of ridiculous stimulus.

I haven't looked at the russian market, but it will bottom when oil bottoms.

Labels: AOB, BUCY, EJ, GHII, MTW, SOHU, XIN

Half Down! Let's make 100% to break-even!

Just For the record, In case you can't read my main holdings changes by looking at my Validation pictures, here's my open positions. I figure --- I'll list them and discuss them afterwords.

Quantity/Ticker/Strike Price

I could only get BEAV for April 2008
April 2009
2 BEAV 25,
2 BEAV 15,

January 2010
2 NDAQ 35,
2 SIGM 20,
5 AOB 10,
3 CEDC 30,
3 YGE 10,
3 MTW 12.5,

January 2011
3 AOB 7.5

Out of them all, I'm bearish the most on SIGM --- it was a long shot and I knew it. I wouldn't buy it right now --- I blew it. Also, the YGE is a Obama play. It's one of the cheaper solar stocks that's actually killing profitability figures. That's one to watch for.

As the market has been punching me in the stomach and taking half of my starting value away from me, I feel that I've been positioning myself in order to take full advantage of the "Hulk" effect. I've been placing lay-away orders on companies in similar positions as me, and slowly losing purchasing power doing it. I think that even if my option positions crumble to nothing, the rest of the portfolio's I manage will surely rebound with returns greater than you'll see from the Dow 30. Will my option positions crumble to nothing? Doubt it. I make highly calculated bets. Most reports predict the end to this by the end of 2009. I'm just trying to take advantage of that by riding my companies through the roof that I've been yelling about all along.

I've been reading reports lately, I'm incredibly bullish. Hedge fund investor (cash flow and holdings) consensus reports indicate a capitulation point --- so do Insider transaction reports, as well as mutual fund cash flow and cash holdings reports.

Obama's going to throw $500B at the US consumer. If I had a bet right now, bet oil has bottomed. I called the top. Now's the bottom. It's at $55 I think today. It's back in the realm of normal trading --- as indicated by the fact OPEC is cutting production.

Labels: AOB, CEDC, MTW, YGE

I am buying YGE, MTW and AOB calls tomorrow morning.

Labels: AOB, MTW, YGE

Greg

I bought the calls at an average price of $6, they’re at about $9-11 now.

Anyway, tomorrow I’m buying calls on MTW and AOB. CEDC is still the way to go if you’re going to choose one I think. If you’re playing GHII put a limit buy order in at $0.11 or less and pray you catch it soon, cause their CFO is going to go promote them at some banquet where a bunch of small companies go.

Making rules you refuse to deviate from eliminates opportunities that come once a lifetime. That said, I broke rules these last three months that cost me a lot of money --- oh well.

Historically, the market goes up in oct/nov/dec of election year. I have no idea what will happen. I just play odds and buy stocks that are cheap relative to the market. Also, I think that by January 2010 --- I hope to be out of the woods as far as the ‘recession’ goes.

Glen

From: tubertini
Sent: Tuesday, November 04, 2008 7:38 PM
To: Bradford, Glen Richard
Subject: Re: one stock

Unfortunately, options is not an area where I have a lot of knowledge. However, I plan on purchasing shares of GHII sometime this week. I wanted to do a little more research and also wait and see the reaction after the election although I may risk a significant move up.

I see that you bought the Jan 2010 calls of CEDC at $30. What price are they at now? Also, the market has moved up significantly over the past few days. What are your thoughts on what may happen through the rest of the year. I was actually hoping for a pull back so that I can pick up some of the stocks I have been looking at for a lower price.

In addition, the one thing I struggle with is adhering to a set of metrics to make my investment decisions. Do you have a specific set of metrics that you rely on and do not deviate from? Do you use some type of spread sheet to perform your analysis on.

Sorry for all the questions seeing that you are the one that was emailing me the question to begin with.


Thanks.

Greg T

Labels: AOB, MTW

Todd,

The 2nd Quarter is usually their strongest quarter, so I expected earnings to fall from 1.044

It fell to 0.80, analysts expected 0.81.

Then of course they lowered their full year outlook (cause of the $0.99 UK currency hedge 1-time cost –--no brainer)

They’re still up Year over Year, That’s good, but I think their crane backlog is likely to be down from the last quarter. They hid those details by mentioning that it’s up Year over year. Crafty.

“The sequential decline in Manitowoc's crane backlog from the second quarter
of 2008 reflected slowing demand for tower cranes in Europe, and a delay in
opening the 2010 order book until material price forecasts and customer
pricing arrangements can be finalized.”

“Crane backlog at
September 30, 2008 was $3.3 billion, nearly 26 percent higher than the
third quarter of 2007 and down slightly from the second quarter of 2008.“

Of course they don’t tell you what the Q2 figure is. Make you look it up.

“For the nine-month period of 2008, net earnings were $210.4 million or $1.60 per share, down from $237.4 million or $1.87 per share in the previous year period.”

That even reflects the $1.00 per share currency hedge. Looks like they’re kicking butt to me.

Haha, This next quote’s funny

“People and Organizational Development: Research shows that engaged
employees care about the future of the company and have a direct, positive
impact on a company's financial performance.“

Research shows that engaged employees care… priceless. So, there’s a lot of filler in their statements.

Alright, I’ve seen enough. This company is still a Buy on my list. It’s too damn cheap. And.. even though this quarter is lower than the last quarter, we are in “tough times” and… it’s up Year over Year. Incredible.

Glen


From: Todd.Johnson
Sent: Tuesday, October 28, 2008 10:57 AM
To: gbradfo
Subject: RE: MTW

Thanks Glen,

If you would, send me your thoughts when they post results after the bell today.

Thanks again,

Labels: MTW

Todd,

“The $2.7-billion acquisition will establish Manitowoc among the world's top manufacturers of commercial foodservice equipment. Manitowoc said it is also is one of the world's leading producers of cranes and innovative lifting solutions for the global construction industry.” (referring to Edonis).

------------Side note: (the point is to illustrate that a lot of construction companies are going to break trends.. and are priced to do so, but some are strong --- even still)

Breaking a long-running trend, Terex posted a decidedly disappointing third quarter. Net earnings slipped by 34% to $93.8 million, even as net sales increased almost 15% to more than $2.5 billion. The total backlog of pending equipment sales, a crucial forward indicator, fell 14% just since the second quarter. Backlogs for Terex's aerial work platforms and construction equipment fell by more than 60% and 40%, respectively. In contrast, Terex reported an 8% increase in backlogged crane orders, and only a 9% drop in pending sales of mining equipment.
Bucyrus, meanwhile, enjoyed another knockout quarter with a 124% increase in net earnings, a 380-basis point expansion of EBITDA margin to 17.9%, and a whopping 74% increase in total sales backlog to $2.5 billion. The company's entry into the underground mining equipment business with last year's acquisition of DBT lends limited value to year-over-year comparisons, but nonetheless this was a rock-solid quarter for Bucyrus.

-----------------End Side note:

My opinion is that Analysts still need to lower expectations for MTW, but I’m concluding that they’re waiting on earnings to come out before they do it. BUCY is another one of my favorites. TEX used to be, but I took it off the table when I compared TEX and MTW and figured MTW was better… not to mention a couple on campus interviews. You’d be surprised what company reps will tell you if they think you’re looking for a job with them and you ask them for the three things that they think their company can improve on and the most because you want to know if you can help.

My opinion on MTW could change if they come out with Q3 results and I see significant weakness. Remember that investors are dumb and 1-time costs generally hurt the stock price over the next year. That said, MTW could soar. Low risk situation if you ask me. I don’t see it getting whooped much more since it already took a beating when TEX came out weak.

Glen


From: Todd.Johns
Sent: Wednesday, October 22, 2008 3:56 PM
To: gbradfo
Subject: RE: MTW

Thanks Glen,

I believe that it is being punished without cause due to the overall market sell-off and especially in the small-cap segment. I like it for 3 reasons.

1. More tied to large government/energy infrastructure projects, not residential/commercial construction.
2. Diversified internationally, especially in some of the developing, high-growth, countries.
3. Good management and cost controls.
4. oh I forgot, they started in the crane business just short of the Great Depression…if they survived that, they can certainly make it through this economy

Labels: BUCY, MTW

Dario,

PCP and MTW are the two of those that I trust the least. I’m waiting on earnings on MTW, but PCP is pretty much hoping that the Boeing strike will end soon. I’ve got a pretty long time horizon and history is telling me to be optimistic. When the market bottoms (if it hasn’t already) it could either surge up, or just meander around and not go anywhere. There’s a lot of fear in the market, more than most market commentators “have ever seen.” According to Ben Graham, the market price of a stock can be broken down into three factors:

1. Intrinsic value (fundamentals on balance sheet)
2. Future growth expectations (income statement projections)
3. Market factors (fear, technical analysis, etc) --- Hugely over weighted in times of widespread panic and fear --- like now.

I try to find companies that have very strong 1 and 2’s and very negative 3’s. I figure companies that make a lot of money and should only be helped by the changing socioeconomic tides should eventually reflect that in their share price; but I don’t expect them to reflect this in their price very soon. Am I selling? No; but it may appear so. I’m assuming that the fear will have dissipated 1 year from now. I’m slowly leveraging my portfolio for a bull run by slowly shifting from stock to long calls (January 2010) on a select few companies in my portfolio.

There’s still a lot of overpriced companies out there; just try not to own any of those.

CEDC should be worth $175, but I’d consider selling at $75
AOB should be worth $20, but the asian stocks are all tracking around ¼ of the value of the rest of the stocks (why, I don’t know, so I’m overweighted now in asian stocks)

For the rest, a good rule of thumb is when the annual growth rate (5 year projected) gets close to the PE ratio OR PEG ratio > 1, sell. But make sure to watch the financial statements for signs of weakness.

Hope this helps?

Glen

From: Dario Visnjic
Sent: Friday, October 24, 2008 6:15 PM
To: gbradfo
Subject: Stocks

Hey Glen

Just read all your article on your website and Stockpickr. Thanks for all the recommendations. I read about the Buy Google and Apple and you said sell Google at $500 and Apple at $160, if am not mistaking. I own some stock that you had in your articles and when do you recommend that I sell AOB, VDSI, PCP, KCI, MTW, and CEDC. I got those from your articles. Also I own JPM, JpMorgan & Chase. When od you think I should let it go.

If you coudl please write back and let me know what you think.

Thanks
________________________________________
When your life is on the go—take your life with you. Try Windows Mobile® today

Labels: AOB, CEDC, MTW, VDSI

Todd,

It is definitely priced below the current forecast and what’s reasonable. There are a lot of companies priced like this right now. There are also a lot of companies that are overpriced in my opinion. My objective is to only own the companies that have little if any debt, consistent revenues and earnings, and are still expected to outperform what they are priced to do, with a good margin.

Out of these companies, I find the ones with the most upside. MTW is just one of them. I think that there’s a lot of money being thrown around out there right now and the PE of the S&P 500 might still be too high. But, I’m all in (on the really cheap companies that meet my requirements). I just wish my time outlook was a bit longer.

Glen

From: Todd.Johnson
Sent: Monday, October 20, 2008 4:14 PM
To: gbradfo
Subject: RE: MTW

Thanks Glen,

So based on your information below, ‘MTW is priced to grow at -1.2% over the next 5 years./ Analysts have it growing anywhere from 7% to 26%’, the current price is well below the current forecast, correct? I see they declared the .02 quarterly dividend today, so that’s good news.



Todd A. Johnson

Labels: MTW

Todd,

MTW is priced to grow at -1.2% over the next 5 years. Their Crane group does about 80% of their revenues.

From their last quarterly transcript: “This trend was reflected in our crane backlog, which stood at $3.5 billion at June 30, an increase of 70% over the same period in 2007.”

“The solid backlog also reflects the pay back of our innovation strategy as well as the success of our new products in the marketplace. Our outlook for the Crane segment remains strong through at least the end of 2010, despite the recent decline in U.S. housing market, the softening of commercial in some mature markets and slowing residential construction in Western Europe. We expect to offset these trends as demands for our higher capacity cranes particularly those serving infrastructure and energy application continues to grow in both developed and emerging economy.”

It’s trading way below where it usually does as far as historical price and growth trends are concerned. (As you’re probably aware).

I measure leverage as the ratio of ROA to ROE and then I look at historical debt. By those metrics, they are 31/13, and in the same neighborhood as their competitors.

Fuel prices are lower, commodity prices are lower, demand is probably going to be lower in the near term.

Analysts have it growing anywhere from 7% to 26%. As far as being relatively liquid, in the short term, they can pay current liabilities and really have been paying off long term debt over the past few years.

http://www.forbes.com/finance/2008/08/07/manitowoc-bucyrus-terex-pf-ii-in_ja_0807soapbox_inl.html

http://seekingalpha.com/article/87831-manitowoc-co-inc-q2-2008-earnings-call?page=2

You’re asking the right questions,
Glen

From: Todd.Johnson
Sent: Friday, October 17, 2008 4:37 PM
To: gbradfo
Subject: MTW

Glen,
I saw your article today, “How to take advantage of bad times” and your thoughts on MTW. Closing @ 11.89 today with a P/E multiple of 3.77, it looks really cheap. I was not aware that they typically are conservative on their earnings forecasts, so thank you. What are your thoughts when they report Q3 at the end of the month? Does their sales pipeline look pretty good right now, even with the slowing global economy? Do they depend on very much leverage, or are they relatively liquid? Thanks and have a great weekend.
Todd A. Johnson

Labels: MTW