Archive for June, 2004

Google IPO and stock risk

Tuesday, June 22nd, 2004

Is a Google Backlash Building? is an interesting article about Google’s public relations. One of Google’s main strengths is that their adsense program appeals to small websites. However, Google has gotten complaints from publishers about late payments and from advertisers about the lack of personal attention. I use adsense and I don’t have bad feelings or see any real alternatives so I think Google is safe for now. Still if you’re considering the Google IPO, will this affect Google’s business and market value in the future?

DVY – interesting ETF

Thursday, June 17th, 2004

I found some interesting information to help allocate assests. DVY, an ETF I own consists largely of mid cap financial stocks, utilities, and telecoms. The article says it can be used to add a value play to an otherwise aggressive-growth oriented portfolio.

The top ten holdings:
ALTRIA GROUP – MO
BANK OF AMERICA – BAC
COMERICA INC – CMA
DTE ENERGY – DTE
EASTMAN CHEM – EMN
FPL GROUP INC – FPL
GENERAL MOTORS – GM
NICOR INC – GAS
PEOPLE BK CONN – PBCT
PNC FINL SVC – PNC

While I have some growth stocks, I lean more toward value stocks with nice dividends. This ETF gives me a nice basket of value stocks with nice dividends and comprises about 10% of my portfolio.

Do you buy on really bad news? OVTI update

Monday, June 14th, 2004

I wrote about OVTI on June 9: Buy on bad news? OVTI – Omnivision Technologies Inc. Well if you did buy, you should have waited for the rest of the bad news. We’re now seeing a few class action lawsuits. The stock is down some more, currently around 16.12. So the question should be changed to “do you buy on really bad news?”

Question about AUO

Saturday, June 12th, 2004

A comment from Buy on bad news? OVTI…

Question: Hi James, I was just wondering if you received your AUO special %5(five new shares for every hundred)dividend. The note I received said I should have had it last week but it’s still not in my account–I want to know if I should have recieved it by now.

Answer: Sorry, but I have no idea. I don’t own AUO. It is looking more interesting than ever though. The share price has fallen after a recent downgrade but the numbers look nice at first glance. Yahoo Finance has a $32.32 target (currently at 17.78) and a PEG of 0.06. It seems too good to be true so I wouldn’t buy without looking at this one a lot more closely.

Pfizer and risk

Saturday, June 12th, 2004

There’s an interesting article over at thestreet.com about how Pfizer (PFE) is more risky now than it has been in the past. This makes me stop and think because one of the things that attracted me to Pfizer was my perception that it was low-risk…

The risk doesn’t seem to be too great for the next year or two, but after that, it may be tough to meet growth expectations as Pfizer needs huge blockbuster drugs to help it grow now and current prices in the US may be unsustainable. The summer outlook may not be so great either, as campaign rhetoric sometimes likes to criticize the drug companies for making drugs so hard to get a hold of for poor (and in many cases the drugs are too expensive for not so poor) people.

Buy on bad news? OVTI – Omnivision Technologies Inc.

Wednesday, June 9th, 2004

A few months ago, MBNA America put out some bad news about credit card default and tumbled to around 12 dollars/share if memory serves. I remember thinking I should buy, but I didn’t because I dond’t understand exactly what the news meant. Now the stock is around 27.00 or so and I wish I had taken a risk.

Am I getting a second chance. Omnivision (OVTI), which makes chips for cell phone cameras, is restating some results and saying they’ll fall short in Q1 (29-31 cents/share instead of the expected 34). Now here’s a company that, according to Yahoo finance, has a PEG of 0.77 and the analysts Yahoo! quotes seem to like it (6 brokers range from one year estimates of 32.00-50.00 with a mean of 41.00 and a median of 42.50). Today the shares are down from the mid-twenties to under 18.00/share.

The IAG & WHT merger

Tuesday, June 8th, 2004

So CDE is asking WHT shareholders to reject a merger with IAG. On the on hand this makes sense: CDE is offering more than IAG. On the other hand, CDE negative cash flow so I understand the board’s concern about the long term prospects of a CDE/WHT merger.

Like CDE, Fairvest also wants shareholders to reject the merger between WHT and IAG. It seems that they feel shareholders should ahve more time to consider the CDE bid.

Meanwhile, IAG is also rejecting an offer, saying that the deal with WHT is superior. The other company, Golden Star, is trying to win a legal battle to make a proposal directly to shareholders. They have a convincing argument too. Pure gold stocks often trade at a higher PE than mixed metal stocks. A combined Golden Star and IAG would be a pure gold play. IAG + WHT wouldn’t (WHT also produces silver).

I’m holding both for now. Some experts expect higher bids. Some say the IAG/WHT merger makes sense. I don’t know what to expect. As for what makes sense, I’d like to see the biggest immediate gain: CDE/WHT and IAG/GSS.

3 new stock ideas

Monday, June 7th, 2004

I used the Yahoo Finance stock screener to look for stock yielding better than 3%, with a profit margin better than 10%, a PEG lower than 1.5, and sales revenue greater than 1 million US dollars. A lot of the results were banks; not interested but three caught my eye:

China Telecom (CHA) yields just over 3% and, according to some analysts, is due to get to 40 dollars in a year. Currently at 32 after a 4% gain this morning.

American Capital Strategies (ACAS) reminds me of MCGC. Yield is over 10% and PEG is right around 1. Since I’m in MCGC I hesitate to invest in a seemingly similar company.

Mills Corp (MLS) yields 5.4% and is a real estate investment trust. It seems that many analysts (according to Yahoo finance) like this one.

I hope this gives you some ideas for your own investment research!

Lifeline making sales and getting off pinksheets

Sunday, June 6th, 2004

I’ve written about Lifeline Bitotechnologies many times before, and have some seemingly good news:

1. They have a contract for their metascope (I guess they changed the name from nipplescope) which should bring in 1.1 million over four years. This is from a distributor in the Middle East, so I would hope to see a deal to distribute in Europe (the EU approved this product) somtime soon.

2. Lifeline is getting ready to leave the pinksheets.

Threats to Google

Sunday, June 6th, 2004

I’ve written before about Google’s upcoming IPO and Google’s corporate strategy. I have to consider bidding for their stock when the IPO happens so here’s some interesting news. Google is facing several lawsuits becuase they allow adwords advertisers to bid on just about any keywords, including registerd trademarks (this is a change from their previous policy). They told the SEC that this could be bad for business.

Google’s business may also depend somewhat on what happens to Gmail, which is currently under attack.