In the Know:A Financial Blog by Michael E. Brisky

Review: Value Stock Guide Premium

2012-02-17T10:37:00.001-06:00

I wanted to take a few minutes to talk about a great stock picking service/website that I use called Value Stock Guide Premium. Over my time as an investor, I've tweaked my investing styles while searching for the most profitable way to make money while still being able to sleep at night. Within the past few years, I've evolved into a "value investor." To me, value investing is the easiest style to understand and quite frankly, I've had the most success with it. I can focus on companies more than on stocks, and not have to worry much about what the market "might do" in the short term.

I ran across this service and was introduced to Shailesh Kumar about the same time I developed my value investing philosophy. I followed him into a stock pick, and it ultimately turned out quite well, and from there I started following his ideas and picks. I was excited to hear that he launched Value Stock Guide Premium because I knew it would be a great resource for investors like me.

Value Stock Guide often focuses on small-cap stocks. I've found that many value investors become drawn to smaller companies. This is a natural effect because that's where you can often find the largest dislocations between price and value, and that's what its all about. You're searching for stocks you can find that are under priced relative to their intrinsic value. Analysts often ignore these companies because they are too small for their companies/funds to invest in. This is a HUGE advantage for individual investors. The "fast money" so to speak does not toy with smaller stocks, and if you know what you're doing, you can find some great investments.

Shailesh has a proven track record, and you can see that directly on the site. Its all very straightforward, and that's the best kind of subscription you can buy. When he buys or sells, you get a notification and a detailed analysis of why.

For me personally, I love investing, but don't often have the time to find the next great stock. This service has proved very valuable to me, and I think it will for you too. If you're a beginner, you can learn a lot. If you're a seasoned pro, you can get some great ideas from someone else who does it everyday.

So take a couple minutes and check out Value Stock Guide Premium.

Have a great and profitable day everyone!

Adams Golf-Part Two

2012-02-14T12:57:00.001-06:00

This is Part Two of my update on Adams Golf (ADGF), which is one of my largest holdings. The company continues to perform solidly in an uncertain environment. Its has been managed conservatively, and they are certainly poised for growth. The rest really depends on the golf business and the economy as a whole.

Three points I want to touch on in this post:

1)The company's cash position and possible uses.

2)Shareholder's impatience and the hiring of Morgan Stanley to analyze the business.

3)The golf club market and the future of the sport as it relates to ADGF.

1) Adams has a great cash position for a company of its size. It grew even further with December's announcement of a settlement with Zurich American Insurance Company, following a lawsuit based on issues involved with the company's IPO. Long story short, Adams received a juicy $6.4 million payout in January. No specific plans have been made as of yet for the funds. This now puts the company's cash position somewhere between $17-18 million, with no debt. So the company is sitting in a very nice position, and is ready to ride out any more problems we may see.

2) Starting last fall, some of the largest shareholders have begun to share their impatience with the management of Adams. The stock has been considered "cheap" for years now and the share price just hasn't moved enough relative to the value of the business. They have begun to put some pressure on management to do something to unlock some value for shareholders. This can mean a number of things, but traditionally it means either A) a dividend to shareholders (either one time, or quarterly) B) a share buyback, or C) an acquisition of another company. In January, Adams announced that it had hired Morgan Stanley to explore "strategic alternatives to enhance shareholder value." Rumor has it that they are also valuing the company and searching for potential buyers as well.

The stock saw a jump after this announcement, and many shareholders appear to be thinking a deal may be imminent. In my opinion, a sale of the company isn't necessarily the best option here. I personally think they'd be selling at a time when you're not going to get optimum value for the company. I'd hate to see a sale just for the sake of "doing something" to placate shareholders. I'd much rather see a dividend and/or share buyback in this case.

3)Adams has a great range of new products out (in fact, they lead the way in golf club technology in many areas). They are #1 on tour in the growing hybrid club market. They have led the way with their "velocity slot technology" in hybrids and fairway woods, which other, larger companies have also started to emulate. They made a great acquisition last year of YES Putters (at a very cheap price), and have just re-launched the brand.

They have a solid group of professionals representing the brand name on tour. Yani Tseng is the #1 women's golfer in the world. They have Aaron Baddeley and Ryan Moore, which are two rising stars on the PGA Tour. They just signed Robert Karlsson, a solid player which will give them a nice presence on the European Tour. They also have a great group of Champions Tour players, including Tom Watson, Kenny Perry, and Bernhard Langher. I'd love to see Adams use some of that cash to go after a "star player" on tour. Whether they admit it or not, golf companies make a lot of money when a player wins a big tournament, and tons of average golfer run out and buy the same clubs, whether they are right for them or not. This has worked well for companies like Taylor Made and Callaway.

The golf industry is just starting to make a comeback, in my opinion. There were way too many courses built in the last 15 years, and many are struggling. Golf is a sport that relies heavily on discretionary spending by consumers. If times are tight, people make choices to cut out things like golf. But the economy is improving. Golf has become cheaper to play as courses are lowering rates to encourage people to come out (at least in my experiences). Tiger Woods is back in contention in tournaments, which drives massive TV ratings. This always spills back into positives for the industry. I think 2012 will be a solid growth year for the game.

In conclusion, I'm holding my shares. If they decide to sell the company, it will probably be for a higher price than it sits currently. If they announce they are not selling the company, we'll likely see a drop in shares. This is mostly because some people have bought in recently hoping to jump in on a possible buyout. In the end, the company is still undervalued though. They are also in a great position for organic growth in the coming years. The economy and golf industry will be back, and they have the pieces in place to benefit.

If you find this post, I thank you for reading. If you want to chat about this stock or situation, feel free to comment to this post, or shoot me an email!

Adams Golf-Part One

2012-02-14T09:00:00.000-06:00

This is Part One (a re-print from last fall) of my update on one of my largest positions, Adams Golf (ADGF). I've owned this stock since late 2010, and feel that although they haven't done anything earth shattering, they are making progress. They are growing their brand with some nice product improvements and are doing quite well considering the environment they are facing.

Let's look at the golf industry as a whole:

It's tough right now in the golf world. Golf is a sport that has always been a "rich man's game" so to speak, and saw a major growth phase in the late 1990's in large part due to the rise of a young golfer with incredible talent (I think you know who I mean). Suddenly there were many more casual golfers, and the game grew. Golf courses were being built left and right, and companies like Callaway and Nike Golf saw some big growth. Now we're in a situation that's a little different. A lot of those golfers just don't have the discretionary income right now. Add that to the fact that Tiger Woods has gone through a major slump, which has affected TV ratings and overall interest in the game.

In my opinion, this is a perfect environment for Adams to make inroads into a larger presence in the golf world. The bigger golf companies are weaker because they haven't been able to pump out the volume of clubs and gear required for them to be profitable. Adams is small enough and is conservatively managed. They had some great quality products (#1 in hybrid clubs, which continue to become more popular), and they have introduced some new products with new technology and a nice look to them. They also picked up the Yes Putter Brand last year for a great price.

They are getting some nice exposure on all three tours with some great players representing their equipment. Yani Tseng is a 22 years and has seen phenomenal success. She is the #1 ranked Women's golfer in the world and was the LPGA Tour Player of the Year in 2010 and 2011. This should help the company with exposure into a lot of categories, and especially with international growth.

I feel that Adams is doing the right things to gain market share (which they are doing), while not overextending the company at an uncertain time for the sport within the economy. When the economy strengthens, the company should only do better.

In Part Two, I'll look at more recent events and what is driving stock right now.

Welcome Back

2011-11-10T14:29:00.001-06:00

Hello All,

I'm writing my first post in quite some time. I'm still following the market and watching for good investments, but haven't had a lot of time to blog about them. Hopefully, I will be able to find the time to keep this up again.

A quick synopsis of my thoughts on the macro situation:

I'd be lying if I said I was an expert of what is going on in Europe with regard to various countries' debt situations. I do not buy into the fear of contagion and what effect it may have. Our market overreacts time and time again to these various threats. Are the situations serious? Yes. Is the US debt problem serious? Yes. Because I can't predict what will happen there, I'm not going to worry about it. Do I have confidence that the they will get through this? Of course. And I do know this: when the market responds, it often does so so swiftly that it becomes impossible to try and maneuver around news.

In our country, I'm most concerned not about the issues we face, but more about the political climate. No politicians or party seem to have the political will to make any necessary/tough decisions. Until we can return the view of serving in political office as a "service" and not a "job", we will have poor politicians who only care about how to get re-elected. If a candidate showed real leadership and was ready to make the tough decisions showed up, I would support him or her completely. But it appears that we have another empty election cycle coming up with more "Reality TV" politics.

Even though we have a tough political climate, a disturbing debt situation, and a tough job market, there are still some segments of our economy that are improving, and things are certainly moving in the right direction. Many companies have cut capacity, cut employees, and cut costs to adapt to this climate, and are now finding it to be very profitable. Is it ideal? Of course not. I hate seeing 9+% unemployment. I do see all these things improving over time though.

A quick update on my portfolio:

Like for most people, things were looking good for most of the year until early August. I hold a lot of small cap, value type stocks. I look for situations where I can buy these stocks a great prices relative to their current asset position, and hopefully they have a catalyst in play which will unlock growth. Or at least have something in play to get people to notice to stock and that its undervalued. What happens to these stocks typically is that over time, the value is eventually noticed and the price catches up. While waiting for this, these stocks can be subject to wild price swings though. Because of their small size, these companies can be subject to inconsistent revenues and or profits per quarter as we go along because they may not have enough of a product mix to balance things out. And because there is little to no news that comes out on these companies, investors often panic if a quarter is not so great or if the market as a whole is not doing well.

I am seeing value out there in a lot of companies, both large and small. But overall, I still mostly prefer smaller companies. They fit my investment goals best. I'm willing to be patient and have developed a tolerance for holding through market swings (its not easy at times, I know). I do mix in some larger stocks, but still using the same value philosophy.

I don't want this post to get too long here. I will be doing additional separate posts about stocks I like and what I'm doing with my portfolio.

If you're reading this, I do appreciate it, and as always, I welcome your interaction here.

Thanks!

Michael

Still Adding Shares

2011-03-04T12:23:00.000-06:00

I'm not spending a lot of time worrying about the events happening in other parts of the world. Sure, they are having some effect on the market, but a pullback was imminent. This only gave the market an excuse in my opinion. Now if we see a carry over effect and it causes fuel prices to spike (they already have, but I'm talking gasoline at $5 kind of spike), then I'd be concerned.

We're right in the middle of earnings season, and most of the stocks I own are reporting on the late end (small caps often do, I have no idea why).

I added shares of Jamba (JMBA) last week at $2.24. This will be it for me prior to earnings. If we see a sell off post-earnings and shares get closer to $2.00 or below, then I could see myself adding again.

I also added yesterday to Adams Golf (ADGF). I really like the opportunity with this company. I think they have some great new products that the market is just finally realizing, and they have some strong players on staff who are promoting the brand well. The sport has struggled in the past few years, but any improvement will only help their sales. Tiger Woods has struggled, and that is huge for the sport. If he can find his game soon (and I know he will) the sport will benefit greatly. We also have the situation of the Acushnet spinoff from Fortune Brands. This will mean that Titleist-Footjoy will be a separate entity and could be a publicly traded company. This would be the best scenario for us here. Adams is not widely followed, and thus under appreciated. Bringing a major player like Titleist to the market would have many analysts and investors taking a look at the industry, and they will discover Adams.

I added shares yesterday at $5.92. I'm pretty happy with my position in this one (started buying in the high $4's). I would add if it drops of course but own enough to be satisfied if we see a substantial move.

Hopefully earnings are solid for both of these names.

Disclosure: Long JMBA, ADGF

CEO Departs; I'm Adding Shares

2011-02-18T16:58:00.000-06:00

News today from Compass Diversified Holdings (CODI). CEO Joe Massoud is taking a leave of absence. Press release here:

Compass Diversified Holdings, an owner of leading middle market businesses, announced today that Joe Massoud, its Chief Executive Officer, has requested, and the Board has approved, a leave of absence to focus his attention on an informal regulatory inquiry that Mr. Massoud has received on matters unrelated to CODI. CODI also announced that its manager, Compass Group Management LLC ("CGM"), has nominated, and that its Board has approved, Alan Offenberg to assume the role of CEO on an interim basis, as well as Mr. Massoud's seat on the Company's Board of Directors. Commenting on the transition, Mr. Offenberg said, "I am honored to be able to serve CODI's shareholders in this capacity. Joe will continue to be available to us during his leave and we are all very excited about the many opportunities the Company has to build value for our owners."

Mr. Offenberg has been a partner with CGM and its predecessor since 1998. Prior to that, Mr. Offenberg was with Trigen Energy, Creditanstalt Bankverein and GE Capital. Mr. Offenberg is a graduate of Tulane Universityand the Northeastern University Graduate School of Business. Mr. Offenberg is currently a director and chair of American Furniture Manufacturing, Inc. and Liberty Safe and Security Products, Inc.

The stock sold off this morning, and bounced around most of the day. I took the opportunity to add shares today at $16.52. Although Massoud is integral to this company, he will still be available to management. They have an awesome portfolio of companies, and they are only getting stronger. I want to hold this company for a long, long time, and when you get opportunities to buy shares at a discount, that's what you hope to do as a value investor. They report earnings in early March, and I expect strong results.

The market continues to be quite strong, and I'm a bit cautious, but quite optimistic for returns for 2011.

Disclosure: Long CODI

New Purchase

2011-02-14T15:58:00.001-06:00

Dr. Pepper Snapple Group (DPS). If you've followed the blog in the past, you know that I've had my eye on this one awhile (link to my previous DPS posts). I've always believed in this industry. High barriers to entry and this is mostly due to brand recognition and loyalty. If you look at everyday consumer products, in almost every space, generics are there, and are often seen as viable alternatives. Why does no one buy the cheap soda? Whether its just within consumers' perceptions or not, people buy the brand in this industry and almost nothing else. Now, I'm unlikely to ever buy Coca Cola or Pepsi. They are huge mature companies. I like DPS because its still a growing brand. Through the end of 2010 their plan was to be in every US McDonalds, and the Diet in almost half of their US locations. We're obviously going to get more info during this Thursday's earnings announcement and conference call. There are a lot of growth opportunities out there for them, and they appear to be leveraging them well.

Here are some stats on their products: (via last year's CAGNY presentation):

41.3% market share in non-cola soft-drinks. Think Dr. Pepper, 7Up, Sunkist, Canada Dry, A&W, Crush.
Snapple; #1 in premium tea category.
#1 in juice. Mott's, Clamato, and Hawaiian Punch.
#1 in alcoholic mixers. Mr and Mrs T, Rose's Cocktail Infusions.
#1 in gourmet CSDs. Stewarts and IBC.

By the way, the link to that presentation is a great read if you'd like to get familiar with the company.

They also have the bottling agreements with Coke and Pepsi. Here's a rundown on their operations .

Potential threats to this investment:

1)Soda Tax- Many states and municipalities are still considering this as a way to generate more revenue. This has been in play for awhile, and I'm guessing it will come up further in the future, but they can pass prices along to consumers to some extent. Its just a matter of how significant the taxes are.

2)Overall Inflation- Think input prices. Plastics mostly. This is an issue for almost every business, but a bigger issue for a soft drink company. Again, its a matter of "how much", as a certain amount can be absorbed without disrupting consumer's buying decisions.

I like the stock at these levels, and depending on what we hear Thursday, or if the market corrects, I'd add to this stock. I'm a pretty patient investor and have made very few sales in the past 18 months. I do own many small-cap names, and love to own and watch those. But lately I've also looked to add some mid to large cap names to a just a little stability to my portfolio, and this will fit.

I bought today at $33.74.

Disclosure: Long DPS

Small Caps Coming Around

2010-11-15T10:47:00.000-06:00

The market has been pretty strong for the past quarter, and as usual, many small cap stocks are a little slow to catch up. In my opinion this is due to a few factors: 1) News flow out of small cap stocks is usually quite slow, and there are few, if any analysts to supply data to the market; 2) Investors like to wait until earnings to make decisions on these stocks (and at least all of mine report at the late end of the earnings cycle). So, we're now in catch-up mode. The news flowing out of the stocks I own has been quite good:

IGO (IGOI): Reported very good earnings, and announced a new partnership with Texas Instruments. Management has been delivering quite well with both new distribution deals, and partnerships. Many are finally noticing this stock and it has been moving.

TII Network Technologies (TIII): Reported this morning. This is a stock where almost no news comes out. But they did make an all cash acquisition earlier this year. We were waiting to see how this is turning out, and according to today's report, quite well so far. I was buying this stock as recently as last week. Lots of upside here is they continue to deliver.

Fortress International (FIGI): Reported last Friday. Another thinly traded stock. I was trying to buy this thing for weeks, and didn't want to compromise on price, and was able to lock in an order last Thursday thanks to Think or Swim's handy iPhone Application. Another cheap stock that I'll look to add to.

Jamba (JMBA) also reported last week. This was the only stock I own that kind of "underwhelmed." They are still on track to roll out some great new products and have a great plan in place. Its just takings some time. Still very confident in this company.

As always, be sure to follow me on Twitter, as I always post when I make a buy or sell.

www.twitter.com/briskycapital

Thanks!

Disclosure: Long IGOI, TIII, FIGI, JMBA

Position Update

2010-10-21T09:27:00.000-06:00

I continue to be cautiously optimistic, and more bullish than most. I finally sold off my small position in ABB, at 22.90. I've been waiting for some time to exit this position, and decided to sell into the strength here. I like the company, but just don't see as much upside for the stock as I do in others I'm looking at. That's what selling ultimately comes down to if you're value oriented. I look at basically two things: 1) Is the stock fairly valued or even over valued? and 2) Do I have somewhere better to put that cash? In this case, I feel pretty solid on both for ABB. Sure, if the market continues to rally it could move higher, but like I said before, I have a few other ideas.

Now, I'm not looking to sell anything else I own, unless we see a lot more upside. For a quick update on what I own for individual stocks, here goes:

General Growth Properties (GGP)

American Capital (ACAS)

Compass Diversified (CODI)

TII Network Technologies (TIII)

Etrade (ETFC)

Jamba (JMBA)

Pfizer (PFE)

Igo Inc. (IGOI)

I will add to any of these, if given the opportunity. I've got a few new ones in my sights as well, but as usual, I'm willing to be patient and (hopefully) not overpay.

There you have it. I'll try to update more frequently.

Disclosure: Long GGP, ACAS, CODI, TIII, ETFC, JMBA, PFE, IGOI

Buffett Sees No Double Dip Recession

2010-09-13T15:35:00.000-06:00

We've all seen the headlines. "Market drops as double-dip fears rise", or something to that effect. We get bearish analysts who specialize in producing headlines to grab onto (we know who these people are). When the market does well, those people go away; when it struggles, they come right out of the woodwork. You know who I listen to? People who actually run businesses. Not people who read sets of data, use only the data that promotes their thesis, and write analysis based on it. Is the economy clicking on all cylinders? I don't think anyone will tell you it is. But there is a lag. Sentiment is going to carry on negative for awhile before things get moving again. Rail traffic is rising, and temporary employment has improved, both of which are positive signs for the broad economy.

Buffett sees things improving "almost across the board" by the way. And they own dozens of businesses across a wide spectrum, as well as employ 200,000+ people.

I think things are improving, and will continue to. It will take time. I'd use the negative sentiment to your advantage with regard to purchasing assets, because by the time sentiment improves on a large scale, prices will be much higher.

Embrace the Fear

2010-07-09T10:12:00.001-06:00

Double-dip recession? I've heard lots of talk about it lately. The fear (at least prior to this week) was palpable in the headlines and you could tell by watching the tape. Nouriel Roubini was on TV again, and they were pulling other various people who are always bearish out to give us some scary headlines (Dow 5500, Dow 1000 etc). I found a nice post on this over at Barry Ritholtz's Big Picture, titled Can the Crowd Forecast a Double Dip Recession?

The economy is recovering. The recovery may not be particularly strong, but it is happening. Todd Sullivan at Value Plays has been laying out an excellent analysis of this during the past week. Economic indicators such as auto sales and rail traffic have been improving. And its not like the market is pricing in some huge V-shaped recovery. It may have been heading that way in late April, but it certainly isn't now. As long as we continue on a path of recovery, I think stocks will be very attractive. With rates this low, the massive amount of cash on the sidelines will work its way back into the market.

So if you're a value investor who is interested in purchasing "companies" at discounts to fair value, you should embrace the fear, as it will allow you to make even better purchases. Too many people let the market or the headlines tell them how the economy is or whether or not they should make this or that purchase. I try not to operate this way, but unfortunately its just the world we live in. Its important that we use this to our advantage.

I've been adding to a handful of names over the past two weeks, and will continue to do so it valuations become even more attractive.

Adding to Current Positions

2010-07-02T15:19:00.001-06:00

Lots of panic out there this week. As value investors, we welcome this type of action. All the talk of double-dip recession, another depression, etc. I'm sure you've heard all of it. With my time horizon, and hopefully yours, I'm quite confident the stocks I hold will be much, much higher by the time I'm ready to sell them. The problem is we're becoming more and more programmed for instant gratification, and thus time horizons have become shorter and shorter. This all plays into Wall Street's hands by the way. More trading = more commissions. The key as always, is spotting value in companies and taking advantage of a market that is full of fear and is ignoring these stocks. But you do, however, have to know what to look for.

I added General Growth Properties (GGP) Wednesday in the mid 13's.

Late today I added Tii Network Technologies (TIII) at 1.48, and Pfizer (PFE) at 14.15.

Tii completed what appears to be a good acquisition that will immediately add to earnings. The stock is still trading at less that half of book value. Lightly traded stock, so you have to deal with that. I'll continue to buy if it stays under 1.50.

Pfizer hit a fresh 52 week low today, and I bought it near that low. I see plenty of value here. Trading at 6.2x forward earnings? Even if those estimates are a bit optimistic, this thing is cheap. I know they have some drugs patents expiring in the next few years, but this stock is cheap. Throw in a 5% dividend, I'm happy to park some money here while we wait for the market to recover.

I'll do my best to post more to the blog. I always post when I make a transaction, but I would like to pass along more info about the specific names I own or am looking at, and will make more of an effort to do so.

Happy Independence Day!

Disclosure: Long GGP, TIII, PFE

Loews Corp. Presentation

2010-06-09T10:30:00.000-06:00

I haven't been posting much here lately, but I always try to pass along valuable information on any of my portfolio holdings. Loews Corp., and specifically CEO James Tisch presented last week at the Sanford Bernstein Strategic Decisions Conference. Lots of great stuff here. Tisch, as always, lays out their strategy and why their stock is a good value. He shoots straight and is very entertaining. Loews has obviously been impacted by the problems in the gulf and their exposure to Diamond Offshore. Even though I'm sure the typical re-active panic legislation is coming from congress and this will likely have some effect on the industry, Diamond is a great company. They don't operate like most energy companies that follow the cyclical, boom and bust cycles with high leverage at the peak and wash out at the bottom. Diamond uses Loews value investing theory and scoops up assets when they are cheap. This is one example that will make them a long-term player in an industry that could see some pressure for awhile.

The bottom line here is I trust Loews management, and their ability to allocate capital. That's what it comes down to with a company like this. When you buy Berkshire, you're betting on Buffett. Same deal here, except, in my opinion, this stock is much cheaper.

Just listen to the conference call, and you'll see what I'm talking about.

I'm also looking to add to a few names that I currently own.

Tii Network Technologies (TIII) looks like they made some good use of cash with their recent acquisition as it will be accretive to earnings in Q3.

I also may add to any of the following on further weakness: L, ETFCD, GGP, JMBA, CODI.

Disclosure: I own all of the names mentioned.

Crazy Stuff

2010-05-07T12:07:00.000-06:00

Wow is about all I can say after watching the tape pretty closely the past two days. My afternoon yesterday consisted much like many others, as I was shocked what I saw. Whether it was some type of trading error, glitch at an exchange or some fund blowing up and dumping everything, it was something to see as the Dow was almost down 1000 points.

These foreign debt situations have happened before, and like previous ones, this will blow over. The concern is about spillover into other countries/situations. Add that to a market that was due for a correction, and well, we all can see the result.

If you feel like stepping in and buying, feel free. I'm being cautious right now. Although I've expressed caution that the market was due for a correction, and I'd be a buyer on any weakness, when we see it happen this swiftly, you have to step back and reassess. Buying fear is the correct thing to do, but you have to be smart about it too.

There is so much happening out there. The European situation, the oil spill, terrorism issues, etc. They are all weighing on the mind of the market. GGP has been fielding increasing offers by SPG, but seems intent on going with the Brookfield deal, which offers the most long term upside for shareholders. In a market like this, when everyone is overreacting, many would rather have SPG's bid, because they can't even think about the long term.

Things are looking good at IGo. They reported a nice quarter, and revenues should see a bump in the coming quarters due to new distribution deals being rolled out.

Just remember that fear clouds judgement, and its important that we don't fall for the trap. Sure, many stocks I own are getting nailed. But I'm comfortable owning these stocks, and will welcome the opportunity to add to my positions at better prices, when the time is right. What I don't want to hold are stocks I'm uncomfortable with, and believe me, I've held them before. Its not fun in a market like this. This is a lesson I've learned through experience, and quite frankly through past mistakes.

Let's see what Friday afternoon brings.

Disclosure: Long GGP, IGOI

Solid Results From Loews

2010-05-03T13:45:00.000-06:00

Loews Corp. (L) reported alongside CNA financial, of which they own 90%. Solid numbers out, like I expected. Things just keep improving for their businesses. CNA is the big driver of earnings, and things are really starting to turn around there.

I listened to most of the earnings call today, and didn't pick up much quote-worthy, but if I find anything in the transcript, I'll point it out later.

Truthfully, the stock is getting pushed down because of Diamond Offshore, of which they own 50%. DO has been sold off due to earnings (they cut their special div.), and the problems due to the oil spill/Obama's offshore dilling plan. If you're looking to buy into the offshore drilling space, now is the time, and DO (or NE) is the stock. I prefer to buy the parent, and get a discount, but that's just me.

Loews book value is now $41.80/share. As I write, shares are $37.29. Value here? I'd say yes.

If you're looking for a quick run-through on their structure, this will work well.

Disclosure: Long L

Adding to 2 Positions

2010-04-22T10:46:00.000-06:00

I've taken advantage of this mornings sell off (I hope at least), and added shares of two portfolio holdings.

I added Etrade (ETFC) at $1.73. They reported solid earnings yesterday after the bell, and are well on their way back. Unless a buyout comes, this is going to take some time, but I am confident that there is money to be made here.

I also added pretty heavily to Loews Corp (L) in the 37.70's and .80's. You can buy Loews stock for basically the value of only their publicly traded assets, and they own so much more. The market is determined not to fairly value this company, and I'm willing to wait. It may take a big move by management for Wall Street to appreciate the value, and they have the resources to pull it off. They are true value investors, and are waiting for the right thing. I feel like I'm buy dollars for .70 here. Their annual report is a good read if you have the time. Also, take a look at this commentary from the Lonely Value Investor blog. I really like reading this site, and its worth your time.

There aren't many new names I'm looking at, but I have a lot of stocks I really like and currently own. I'd rather buy more shares of current names, and will continue to do so if the opportunity presents itself.

Disclosure: Long ETFC, L

Added Some GGP

2010-04-20T08:27:00.000-06:00

I've been pretty cautious on adding anything here as many of my stocks have run up a bit. I did add some General Growth Properties (GGP) yesterday around $15.11. I'm not going to speculate whether Simon Property Group, or the Brookfield group, or even someone else comes out on top. From what I've seen so far, many of the best, brightest investors have been involved in this thing and that tells me that A) There are some really good assets at stake here, and B) They are being bought at cheap levels. Now depending on the particular outcome and who emerges as the leader here, it may take more or less time, but I do believe we'll see shares higher in the months ahead. So I went ahead and added, and increased my position by about 1/3. I wish I could have been many, many more shares at my original buy price of $1.79.

Also, if you're looking for more analysis on the GGP situation, check out Todd Sullivan's Value Plays blog. It is well worth the subscription, as I've made that cost back many times over.

Disclosure: Long GGP

Taking a Step Back

2010-04-13T08:58:00.001-06:00

The market is taking a breather this morning, and it is definitely due. We crossed 11k on the Dow, and that was about as far as it went. While we're definitely due for some type of pullback, but I wouldn't be surprised if it isn't that significant. The economy continues to improve, and you can just feel the confidence come back to the market as things move gradually higher. To me, its still a market for picking stocks though. I look at the large-cap stocks that most talk about and I really don't see a catalyst for them to make a sizable move. Yes, the economy is improving, but that has been priced into many stocks. I continue to like smaller cap names, and some other non-traditional companies.

I still would point to a company like Loews Corp (L) if you're looking to find value out there. The market continues to undervalue the total group of their assets. CNA financial, which Loews owns a 90% stake is a classic case of a stock beaten down badly during 2008-2009, but is primed to perform well very soon. I also think commodities will be hot again very soon. Loews has great assets there, with a 50% stake in offshore driller Diamond Offshore, and natural gas exploration and pipeline assets as well. The stock still trades below book value, and I think there is a pretty good chance some of this value gets realized when Q1 earnings come out of these various companies. I took advantage when the stock pulled back into the 35 range in January, but haven't added to the position yet. I'll definitely look to add before earnings on May 3, and maybe a correction will play right into our hands on this one and help us buy Loews shares for cheaper.

Etrade (ETFC) is another company I may look to add as well. Their operations are improving in the loan portfolio, and the brokerage business is a good one. Although lower volatility has brought trading revenues down a bit, more funds and new accounts continue to help them grow. Someone might swoop in and buy them if the stock stays this low, and if they don't, I still see shares appreciating as they move back into profitability. Here's a good story I found at thestreet.com about a potential deal for Etrade.

If the market reacts like it has been (buying any dip), we'll probably have moved higher again by the time you read this. : )

Disclosure: Long L, ETFC

How to Follow My Portfolio

2010-04-06T08:37:00.001-06:00

I haven't been able to update here as much as I'd like, but most of my recent buys have been going well. Especially IGO (IGOI) and Jamba (JMBA). Both have lots of good things coming ahead and I'll continue to add to those positions if the opportunity presents itself.

I wanted to make sure that those out there reading can follow my trading portfolio via Covestor. Covestor tracks all my trades and keeps track of performance. They will send you email alerts when I make a trade as well. It is only tied to one of my accounts, but it is the account where most of my activity comes from. So if you're interested, sign up at Covestor.com and follow me. My username is briskycapital. You can also click the widget below to go directly to my Covestor page.

Disclosure: Long IGOI, JMBA

Sold Two Positions

2010-03-29T09:21:00.000-06:00

Last Friday RHI Entertainment (RHIE) filed their 8-K, and things are not looking particularly well. It appears they are still struggling with their debt load and revenues are not coming in quickly enough to meet those obligations. I've decided to jump ship on this one, with a good sized percentage loss. I didn't lose much as it was a very small position, and I knew going in that it was speculative. I was able to cash my shares out after hours on Friday for around 0.26. I'm not sure what will happen from here, but I'm going to focus on other things.

A couple of lessons to learn here:

1) Excessive amounts of leverage can be troublesome, especially for a small company. The small cap names I've been buying lately are in much better financial shape, which gives them a nice margin of safety in case their revenue stream slows up.
2) Don't buy a stock strictly because someone else owns it. What drew me to this stock was the fact that Seth Klarman owned it. He is an outstanding fund manager, but everybody makes mistakes from time to time, and I should have seen it as a clear warning sign when the bailed late last year.

I also sold out of Carefusion (CFN). Its still a solid company trading cheaper than its peers, but I have better things to put my money in. I don't like the uncertainty occurring for them with new health care legislation, and rather than find out, I decided to split. This is probably still a good stock, but it goes against my rules for holding stocks. Its time to sell when either: A) The company becomes fully valued or overvalued; B) The situation changes and more uncertainty arises. This is in the B category. And there are cheaper stocks out there that I can buy with that money.

So, we'll move on from these. There are lots of exciting things happening both with stocks I currently own, and ones I'm looking to buy.

Disclosure: None

Update on Positions

2010-03-25T13:53:00.000-06:00

Sorry its been a few days since I've posted, but plenty has been happening. The market continues to move to the upside, with little resistance. Some deal applies for me, I think the market is extended, but would not be surprised if it continues to run. Consumer confidence is coming back and there is too much cash out there getting terrible yields.

Jamba (JMBA) has really performed well since I've purchased it at 1.66. I added it last week at 2.12 as well. Today its trading over 2.50 as rumors are flying that Starbucks (SBX) may be interested in Jamba. The stock still has a small market cap, without a huge float and is subject to some price swings. The pattern I've noticed since volume spiked is this: someone has been acquiring the stock. Probably a few different mutual and/or hedge funds. When their big purchases come through, they are pushing the price up pretty quickly. The stock usually pulls back once that volume slows a bit, and that is the time to add if you'd like. For example, this morning when the volume kicked up, it traded as high as 2.82, and has pulled back to 2.52 as a write. I've noticed this 2 or 3 different times within the past couple of weeks. I'll probably add to my position again on any further weakness.

I'd also add iGo (IGOI) and maybe Etrade (ETFC) on weakness.

Added to Jamba

2010-03-18T14:32:00.000-06:00

I added to my Jamba (JMBA) holding late in the day today at $2.12. It has pulled back the past couple of days on a little lower volume. I'll be buying heavier if we see shares back below $2.00. They are just starting to roll out many new items, and coming into the busy season for their core products.

Just Go With It

2010-03-17T08:18:00.000-06:00

As many have said, and most of us have felt, the market feels like its at a short-term top. But I've learned to know better and markets can continue to run (or fall) much longer than we all think possible. Many businesses are continuing to show improvement, and still more are being priced for it.

I still think there are more and more individual investors coming out of the woodwork as they regain confidence in the market, and that will continue, especially in a low-volatility, but upward moving market. The yields on cash are just too low. People are going to go after a better return, and the stock market is the best spot for that right now. So while I know we're due for a correction, I wouldn't be surprised if we don't see a large one.

My small cap stocks continue to run, and I'll continue to add to my positions if opportunities present themselves. Specifically Jamba (JMBA) and iGo (IGOI).

TII Network Technologies (TIII) reported earnings this morning, and after a quick glance, they look pretty solid. Gradual improvement, and better results due to cost cutting. By the way, its awfully late to report Q4 earnings. Q1 is almost over! These small cap names with a lot of cash on hand have been doing well lately. Even if operations don't improve dramatically, you're likely to see some gains as valuations return to more normal levels as the economy picks up.

Dr. Pepper Snapple (DPS) got an upgrade last week, and an analyst noted that they're likely to enter into a bottling deal with Coke, much like the Pepsi deal. I missed my entry on that stock, and I'll buy it if it pulls back. I'm still a little surprised it hasn't taken any kind of a hit due to the threat of a soda tax. I'll continue to keep an eye on that.

Disclosure: Long JMBA, IGOI, TIII

Update on Positions

2010-03-11T10:28:00.000-06:00

Jamba- Really like where they are headed. The next few quarters will be key as they roll out new products. Can these products translate into earnings?

iGo(IGOI)- Reported last night. Earnings pretty solid. The big news was that Wal-Mart decided to bring them into all stores. Yeah, that's big news for a company of this size.

Dr. Pepper Snapple- Upgraded this morning at UBS. They believe a potential deal will be struck with Coke regarding distribution like the Pepsi deal. I haven't bought this yet, but will.

Disclosure: Long JMBA, IGOI

Jamba Reports; Stock Drops

2010-03-10T09:47:00.000-06:00

Well, those who were buying heavily last week in anticipation of strong results were mistaken. By the numbers, it wasn't too strong. They missed on EPS, revenue, and same store sales weren't great.

The key here though is everything they've been rolling out likely hasn't had a chance to be reflected in earnings, so anyone selling is jumping the gun here. Hot beverages are just being rolled out. Their relationship with Core-Mark will give them access to thousands of convenience stores. All of that will take time to roll out.

I listened to the call last night, and I continue to be impressed with management, and their plan for growing this company and brand. Here are a couple of tidbits I picked up:

-They are strengthening the balance sheet with $31.5 million in cash and basically no debt.

-They are selling off corporate owned stores to franchisees.

-They are expanding to one international market this year, with more likely to come.

-They now have a range of products that make them not only a year-round option, but they are capitalizing on healthy options for fast food, which is going to be a huge market.

-They did mention that coffee is something they'll be looking at, but will only add it if they can put their own twist on it.

I plan on adding to my position, maybe even today.

Disclosure: Long JMBA