Investment "Logic"

Today I bought a small lot (25 shares) of Broadwind Energy at $12.10.  As indicated in my weekly summaries, Broadwind is announcing their first quarter earnings results tomorrow morning.  This is a US-based industrial company with ties to the boom in Oil and Gas as well as their strong presence in building US wind turbines.  I believe the quarter will have positive results and a positive outlook for the rest of the year, pushing the idea of the company fully turning around and becoming profitable.  However, I do sense risk with this stock and it's why I've taken a very small position.  Today the market was up, but the stock was down.  It's been range-bound between $11 and $14 the last few weeks and ran up huge () in 2013.  This helps put the stock into the category of a high multiple growth stock and if anything goes wrong, this can be slaughtered like so many of the biotech and sofware as a service stocks over the past 2 months.  There are also p...

I'm getting a little behind on last week, but it was fairly uneventful on the portfolio.  It sure didn't feel that way, though.  There was a lot of movement for a week that ended flat to slightly down.  Housing numbers weren't great, but Home Depot also got a significant upgrade.  Next week I have earnings reports from Broadwind Energy (Wednesday) and On Semiconductor (Thursday).  Both are rather speculative plays.  During the ebbs and flows of the markets lately, Broadwind has a hard time going down, meanwhile, On got hit pretty hard this week - especially when one of its customers, Avnet, reported lower than expected numbers.  My feel is that if the markets pull Broadwind down early in the week, you would want to buy into some of the position ahead of the quarter.  If they give good numbers, I have a feeling the stock will soar.  On I see more of a sell on the quarter regardless of news.  Sell as soon as you can if they miss, and sell ...

Finally, I've been given a week's reprieve.  With earnings fully under way, the market has finally had some reinforcing news to give it direction and that news after 2 weeks of earnings from some major players in the financial, consumer and packaged goods, industrial, and tech sectors is rather positive when looking forward.  Even when looking backward at the quarter, things are going fairly well from what I've seen.  A third of the stock I hold have already reported.  Next week, I'm getting a chance to take a breather from the whirlwind week I had.  No companies report, however there will be a few things to keep an eye on.  First, housing price and housing sales numbers will be announced.  Both numbers have the ability to impact Home Depot's stock price.  I'd really keep an eye on the home price numbers.  As home prices rise, Home Depot states that they see people spending more on home projects.  The other thing to keep an eye on will b...

Ding! Ding! Ding!  Welcome to round two of our activist investor showdown!  Yesterday Pepsico announced their first quarter fiscal 2014 earnings.  After the drubbing Nelson Peltz and his firm has given the company since the last earnings call, this was a nice counter-attack - letting it's business, give Peltz the business.  Now for those not aware, Nelson Peltz is a highly respected hedge fund manager.  He has a storied history of convincing various food and packaged goods companies to take actions to benefit the investor (himself and others).  The strategy lately is to break companies up to "unlock value" and this is the proposition being pushed upon Pepsi - requesting that they spin off their snacks division because the beverages division is holding them back.  As a part of the 2013 year end conference call, Pepsi announced their research and findings which they believe proved that there were a very large number of synergies between the snacks and be...

Notes: Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash Today Honeywell posted their 2014 fiscal first quarter earnings numbers.  Earnings beat expectations by 2 cents and revenues were in line despite Defense and Space performing a little worse than expected.  Additionally they guided higher on the year by raising the lower end of their guidance from $5.35 to $5.40.  Upper end of the range has remained unchanged.  On a quarter that historically is a little on the weaker side on the year as a whole, this quarter's results were rather impressive.  As expected, management continues to under promise and over deliver.  I think it's important not to let these beats get you overly joyful, though.  Despite management's guidance, the analyst community is actually near the top of guidance with a year-end EPS of $5.54.  With ...

Notes: Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash Today Citigroup announced its first quarter 2014 results.  They beat estimates of $1.15 with an adjusted earnings per share of $1.30 and had slightly less revenues compared to first quarter last year, but still beating estimates.  All in all, this was a much  better than I and many others expected after all of the negative news that has been hitting the presses lately (Rejected CCAR proposal, fraud at Mexican branch, 10 year interest rates dropping, etc).  The Good: There are a few things I noted in the conference call I think are worth calling out besides the summary details I already provided.  First, expenses are flat to down.  Citi announced their last set of layoffs not too long ago and the company is just starting to realize the benefits.  These decrease...

Did someone yell "FIRE!" in a burning theater?  If so, apparently I didn't hear it and am getting trampled by everyone that did.  Yep, I'm getting beat up pretty bad here lately.  That biotech stock that I've held to help me beat the S&P last year has been crushing me, and I've had my heels dug in for a mighty long time now.  I'll save more on that for another post, though.   We have entered the next round of earnings season.  Man, I swear I just got done with the last one!  I guess that confirms my suspicions that my portfolio is a little larger than it should be.  I will need to focus on paring things down.  In the meantime, I have conference calls to listen to and they should help me decide what I'm going to do.  Next week, in particular will be a huge amount of work, so let's break down what we're looking at.   Monday will be Citigroup's call.  Today we had bad numbers by JP Morgan and decent numbers from We...

It' been a whirlwind kind of week.  Dow and S&P 500 hitting new highs before pulling back, Nasdaq going on a wild roller coaster ride that's enough to make anyone upchuck.  Anything that's been a high flyer has been taken to the woodshed.  Other stocks, especially those that have low multiples seem to be faring better.  And then the week ended with a rather ho-hum employment number.  Good enough to be better than last month, but not so good that interest rates start rising or people feel like the US economy is really starting to go somewhere.  There are a few things to watch next week as earnings reports will start to kick off.  Alcoa always gives a nice indication where the industrial stocks might head and they report on Tuesday.  Friday we start getting earnings reports on banks with Wells Fargo and JP Morgan.  If both companies give lower than expected performance - or worse guidance - Citigroup might get hammered.  Citi reports i...