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Showing posts from 2012

Markets in turmoil, what's my game plan?

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So last Friday we received enough bad news to make a funeral look fun. Jobs numbers were less than half of expectations, Yields for some of government bonds for problem countries in Europe like Spain are approaching an unsustainable 7% and major sources of growth in the past like China and Brazil are slowing significantly. Basically the world was ending according to news related to the equity markets. So what now? What do I plan to do in such a questionable market?


To start with, where am I now from where I was over a month ago (wow, I've really been slacking on the blogging world)?  Not much has changed, actually.  I didn't sell any of my Citigroup stock at the points I was thinking of because it dropped so fast from the JP Morgan ordeal.  I suppose I could've had a stop in place, but considering the rate of decline, I think this is the better option.  Citi's price to book is close to half when the norm is actually 1 - 1.5 on average.  When (not if) the markets find …

Wagons are circling again

It's that time again.  Time to circle the wagons.  As I sit here looking at how the market has acted as of the last 2 weeks and recognizing I'm just starting a new slew of earnings reports, I recognize the second quarter isn't likely to be as friendly as the first was to us and it's time I stake my position, make my predictions, and try to establish some semblance of a plan.  Once again, I'm nothing more than a rookie, doing this more as a hobby with desires to improve upon my abilities day after day.  Had I a teacher, I'd be informed "I have much to learn." as I hang my head in shame.

So where do we begin?  Well, no better place than with what I have now, I guess.  I still have the same 7 stocks and I have successfully managed to make sure I have cash on hand to buy things that strike my fancy.  The one thing I can say is that I don't really want to hold more than 7 stocks.  Considering BWEN as a stock I still hold is a tough pill to take.  At th…

Catching up as we go into new quarterly reports

So much for hammering a bunch of details out quick.  It's amazing how life can get in the way of things sometimes (and how I lack discipline others).  So the good news is that I have listened to the conference calls I haven't talked about.  The bad news is I just haven't talked about them.  At this point, I'm not going to go in-depth any more because it's not worth it.  I do want to clearly state my thoughts and position, though.

We'll start with Encana Corporation (ECA).  As an oil and gas exploration company that's primarily focused on natural gas, it's safe to say the quarter wasn't anything to write home about.  They missed expectations, primarily due to the awful Nat gas prices (and they only get worse for Q1).  On the good side, they managed to keep costs below guidance and they've also produced some divestitures that should help keep their balance sheet stable until Nat gas prices recover.  In addition to the divestitures, they're als…

Fourth Quarter 2011 results for On Semiconductor

Ok, so I've fallen a bit behind on things so there will be a bunch of these coming fast and furious.  The first one I'm going to address it On Semiconductor.

On reported a couple weeks ago now with results that beat street expectations of $0.09 by $0.04 for earnings of $0.13 per share.  This is a pretty handy beat, considering the impacts of the Thai floods on some of the Factories ONNN recently acquired from Sanyo.  The 4th quarter was riddled with closed factories and shifting work streams from those factories to other locations.  If there's any kind of positive to take from this event and the pains it put on the company, it'd be the fact that these issues happened at a time when product cycles were actually near their worst.  Customers had a glut of product and demand was lower than normal over the last half of the year, but is now seen to be picking up and falling into normal cycles again - just in time for ONNN to have all of their facilities up and ready (early s…

Honeywell Q4 Report analysis

This week I'm going to cover the earnings call for Honeywell (HON).  They reported 4Q and fiscal year 2011 numbers as well as guidance for 2012 on Friday.  While I was at my real job seeing headlines, you'd swear Honeywell reported something unfavorable.  Surprisingly, based on the headlines alone, the stock was up throughout the majority of the day, though.  I looked forward to hearing what all was said on the call because it's been noted in other teachings that headlines can be misleading.  My findings?  This quarter, and the full year, was nothing less than stellar in my opinion.

Headlines stated that Honeywell reported a net loss in the fourth quarter.  This is actually true, but that loss is only after a large sum was taken out for pension funding.  Honeywell's numbers are truly based on a proforma (before pension funding) basis and they earned $1.05 per share.  This was the very top end of estimate as was their fiscal year numbers, which was 4.05 per share.  Not …

Citi - Fourth Quarter review

Today I begin my assessments of conference calls for quarters ending Dec 2011.  Last week, Citigroup announced their Q4 earnings.  Let's go through and see what a rookie like me notices.  This isn't the first conference call I've listened to, but this is the first one I'm going to try to articulate for my own memory as well as to share with others.

Want a definition of a bad quarter?  Look no further than the results from Citigroup this last Monday as they reported $0.39 per share earnings - 22% below estimates of $0.49/share, 5% below Q4 earnings for 2010 and a whopping 53.5% below Q3 earnings.  Talk about a stinker!  But that's just a broad summary, so let's actually try to get into good and bad things I heard in this last quarter's conference call.

I'll start with the bad things today since there are so many.  I already stated the poor earnings, but why were they so poor?  Here are some of the things I noted.  First, I find it amazing how so much emp…

Ranking my stocks

I've heard a lesson once that it's good to take a look at your stocks when the markets are closed and rank them once a week.  The purpose is to be able to look at your holdings without the stresses of a moving market to influence your stance on things.  I haven't been able to make this a personal habit yet and even if I do, I don't think I'll post it all here every time, but I'm looking to do it today and want to post it because I think it has some additional merit.  In today's news, a number of things have come up which have the potential to change the general feel of the market compared to the first couple weeks of the year.  First, a number of EU countries have been downgraded by S&P, second Greece is announcing it is having difficulties coming to agreements with its bond holders to prevent the country from defaulting.  In 2011, Greece and the EU as a whole was a huge impact on the markets in a negative fashion and after 2 weeks of the stock market o…

Knowing what you own

Many wise investors of the past have always said it's important to know what you own.  Today I'm going to talk about the final stock currently in my portfolio and it's one I feel I truly know - John Deere and Company (DE).  John Deere is primarily known as a farm machinery maker although it also has streams of income through construction equipment and smaller equipment like lawn tractors.  It's a company I feel I have a strong understanding of because my childhood background is from farming and since it's a part of my family's livelihood, I still keep an eye on Agriculture as well as some of the interconnected industries.

Deere is my newest addition to my portfolio and so far it's one piece of work I'm most proud of so far.  When I was first looking to get into the market, prices for DE were at $90 or more.  It just seemed too high for what I was willing to pay and that I had missed the run.  It almost reached $100 before macro economic factors took hol…

ON Semi - Signs I can be lucky or am maybe learning

Awhile back, I stated that I made a mistake because I have 2 stocks which are speculative.  I've spoken to one of them before - Broadwind Energy (BWEN).  Today, I want to talk about the other - On Semiconductor (ONNN).  For once, I seem to be learning a little bit - although it sure would've been nice to learn more faster here.  I caught wind of this as a stock when seeing it being touted as an mobile internet play a couple years ago.  I saw the CEO speak a time or two on TV and I actually took time to look into the company before I started buying some of the stock.  I was buying during a pretty decent time, as it was the "off months" of the tech sector (tech stocks have an uncanny habit of performing poorly from spring until mid-fall).  But I started losing some of my faith in the stock as it was dropping quite dramatically for a single-digit stock price.  I was becoming bearish and expecting it to drop farther and farther before I should consider doubling down and …