Tom Armistead submits:
Jabil Circuit (JBL) has soared since September, going from a low of 10.17 to a high of 20.38 during that time span. Jim Cramer, after making a good call on the stock, has been hyping it relentlessly, and recently had CEO Tim Main on the show for an interview. An article by The Inflection Point here on Seeking Alpha suggests the stock has further to go, proposing a high end 40 target for 2012. As this former value stock moves into the momentum category, the question comes up: what are these shares actually worth?
I wrote the company up favorably back in March 2009, when it traded as low as 3.73, discussing the use of P/S as a valuation metric:
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Peter Mycroft Psaras submits:
The main thrust of this analysis is concentrated in three parts. The first two parts are based on free cash flow (current and historical) and the third is based on historical price action as a gauge of investor sentiment.
The three methods used in this analysis are:
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Morningstar submits:
By Vishnu Lekraj
We see positive private sector growth in the new year — and one opportunity in particular.
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Power Hedge submits:
SeaDrill Limited (NYSE: SDRL) is a Norwegian-Bermudan offshore drilling company that is looking very interesting as a long-term value investment prospect. Due to various political and geographic factors, the world’s supply of oil is in increasingly difficult to access locations. SeaDrill is well aware of this and is positioning itself to capitalize on this unfortunate reality.
Over the past several years, the company has been investing in state of the art drilling ships and platforms. This should allow the company to prosper by drilling into oil patches in the more difficult locations in the world. So far, that strategy appears to be working. SeaDrill boasts a 97% utilization rate for its jack-ups and a 95% utilization rate for its floating rigs. That is significantly better than its competitors. This means that the company is running much more efficiently than its competitors.
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Tate Dwinnell submits:
Zacks Investment Research has JA Solar (JASO) rated as a Strong Buy based on growth and valuation. Combine that with the fact that it has pulled all the way back to its 200 day moving average and it adds up to a very compelling solar play at current levels.
Zacks points out that JASO is now trading with a PEG ratio of just .4 (any number below 1 is very good), a forward PE of 5.2 (S&P average is 15.2), a price to book of 1.3 (in the range of a value stock) and an industry leading 22% ROE.
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David Pinsen submits:
On Wednesday evening, I mentioned to those on the market neutral trade notification e-mail list that I planned to short Ameristar Casinos Inc. (ASCA) and buy an equal dollar amount of Gaming Partners International Corporation (GPIC) on Thursday. It turned out that there were no shares of ASCA available to short Thursday, but there are options available for it, so you can establish a synthetic short position in ASCA.
Ameristar Casinos Inc. (1), headquartered in Las Vegas, owns and operates eight casinos spread over several states in the U.S. In August, the company announced that it was looking to be acquired, sparking a rally in the stock, but earlier this month the company announced it was no longer seeking to find a buyer — presumably, because it couldn’t find a willing one at whatever price it was seeking.
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Markos Kaminis (Wall St. Greek) submits:
Rare earth dealing stocks took off this week, reviving a year-long climb. By Tuesday the popular press was well focused on the gains, as a report that China would be limiting exports of rare earth elements found the wire. At this point, investors are most interested in learning if it is too late to benefit, and we think we have uncovered a couple ways you still might.
In case you were unaware, rare earth elements are of strategic importance to our defense industry, and China has quietly amassed a 96%+ majority of the world’s supply of the scarce stuff. We are talking about dysprosium (vital to clean energy), terbium, europium, neodymium, and yttrium. These are not household names, but the iPhone and other mobile phones, flat screen televisions, compact fluorescent light bulbs, and rocket guidance systems they are used in are, and clean energy initiatives involving wind turbines and electric cars will need them too if we are to seriously move toward energy independence.
Showing us how China will deal with the world in a future in which it becomes more important, the country has imposed criminal export taxes on these and less expensive rare earths like lanthanum and cerium, which are used in oil refining and glass manufacturing. The World Trade Organization has banned export taxes, but China has imposed them on these elements for the last four years – simply because it can. In some cases, materials that cost a few dollars a pound in China, cost $40+ elsewhere, due to the tariffs. That’s called giving it to ya good where I come from. Imagine how China will deal with us when it is a more important military and economic power.
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The Inflection Point submits:
Given the substantial move of equities over the past two years, traders will likely become more selective in 2011 and focus on those companies that can grow significantly faster than the rest of the market. While there are a multitude of names poised to show strong growth in 2011, many have already seen their stocks move 300-400% over the past 18 months. APKT, FFIV, NFLX and RVBD are some examples, to name a few. As such, we have chosen to focus on ten companies poised for outsized growth, all of which could potentially double over the next year. Admittedly, the stocks of these companies have all recently doubled in the past few months. But it is important to keep in mind that a stock must first rise 100% before it is able to extend its move to 300-400%. As trend-traders, our goal is to be positioned for the next 100% move higher in some of these names. While the reality is they will not all go on to become big winners, if we are right about just two or three of these names, we will be off to a very good start in 2011. Here is our list:
Axcelis Technologies Inc. (ACLS): To understand our bullishness on semi-equipment maker, Axcelis, look no further than the company’s business model. As gross margins scale to the 41% level next year, new investors should warm further to the company’s shares as they realize the tremendous earnings leverage that will be achieved with these margins. Currently, estimates for 2011 call for ACLS to earn $0.24 a share on $368M in revenues. 2012 estimates have recently been increased to $0.50 on $407 Million in revenues. Based on the company’s 1.5 book-to-bill ratio last quarter and a spate of recently announced orders the past few months, we feel ACLS could report 2012’s estimates by next year alone. If all goes right, peak cycle estimates for 2012 could eventually trend toward $475M in revenues and $0.65 in earnings. Add in the $0.50 in cash on its balance sheet to the peak earnings potential of $0.65, and place a 10 P/E multiple on these numbers, you get a double by the end of next year. We remain buyers of ACLS on pullbacks to $3.30-$3.40.
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Eiad Asbahi, CFA submits:
Active Power (ACPW) is a defensible business that’s likely to trade at a multiple of the current price over the next several years. It’ll pay to get to know what it’s all about and to understand the changes it’s driving in the space for energy storage.
Description of business and company background
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Andy Li submits:
In a world where many investors are fleeing from hot Chinese IPOs with a high valuation matrix, I looked at Chinese small cap stocks and found another undervalued gem in the medical device sector: Dehaier Medical Systems Limited (DHRM).
DHRM is a leading distributor and self-branded provider of medical devices based in Beijing, China. DHRM designs, develops, and markets self-branded homecare medical products (oxygen homecare products) and distributes products manufactured by other companies.
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Jx Capital submits:
Absent a Rip Van Winkle-like bout of post-Thanksgiving somnolence, an attuned investor is by now aware of the increasingly ebullient sentiment among both retail and institutional equity market participants. An article addressing this point in the December 20th issue of Barron’s caught my eye in particular. Ten strategists were polled, and the most pessimistic of the bunch, Douglas Cliggott of Credit Suisse, projected 1,250 for the S&P 500 index at year end 2011. David Kostin of Goldman Sachs was most optimistic with a projection of 1,450. The group’s average was 1,373.
Such market sentiment is good reason for considering stocks least affected by recent market pullbacks and adding some of those stocks to or increasing their weights in net-long portfolios. I book-end the three chief S&P 500 pullbacks in 2010 between January 19th and February 8th (-8.1%), April 23rd and July 2nd (-16.0%), and August 4th and August 26th (-6.8%). A screen of S&P 500 stocks’ beta values over these three time periods produces the following top 15 names, in ascending order of the extent to which the S&P 500′s returns impacted their daily returns:
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Charlie Anderson submits:
During the course of the business cycle certain industries, and certain companies within those industries, fall out of favor. Navigant Consulting (NCI) is currently one of those companies.
The recession has weighed heavily on the consulting industry, including Navigant. Despite this, Navigant has identified some areas for expansion and has repositioned itself within the industry. Navigant’s only advantage over its competitors is size. It is one of the few national consulting firms in the United States with offices around the country. This, along with its depth of knowledge, has given Navigant some competitive advantage, at least over newcomers to the field. While other companies, particularly Accenture (ACN), are larger, Navigant has client relationships that are difficult for competitors to break.
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Toby Shute submits:
This year has been kind to most commodities. Rare earth metals? Ridiculous. Silver? Stupendous. Orange juice? Outstanding. Corn? Cowabunga.
Natural gas? Not so much. Prices are down around 24% this year, as the market remains stubbornly oversupplied. Weak postrecession demand has met with an abundance of gas flowing from the nation’s shale wells. Pontifications that declines from conventional gas wells would overwhelm these unconventional supply additions have not panned out. Daily gas production in Texas is higher than it was a year ago. National production is up a chunky 6% or so, according to the latest government data.
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Jason Chew submits:
Achillion stock (ACHN) has been flat all year, underperforming the biotech indices as well as its peers in the Hepatitis C drug development community. The stock began to leap a couple days after the company announced that data from ongoing clinical studies of ACH-1625 has been accepted for presentation at the 21st Annual Conference of the Asian Pacific Association for the Study of the Liver (APASL 2011) to be held February 17-21, 2011. It has since climbed from $2.73 to close at $4.00 Wednesday, a 47% increase since the December 6th announcement.
So why all the excitement? Achillion had been making headlines all year; it promoted two new drugs into the clinic, began Phase II trials for lead candidate ACH-1625, presented at multiple industry conferences, and raised a total of $71.4 million in stock offerings.
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Investment U submits:
By Tony D’Altorio
There’s only one business duller than selling shoes. And that’s selling shoes in slow growing markets like the U.S. One company that does just that, Collective Brands (NYSE: PSS). It runs Saucony, Sperry, Keds, Stride Rite children’s brand and Payless ShoeSource discount fashion retail chain. Its mature U.S. business makes it difficult to achieve any real growth. So it will probably focus on remodeling some stores while shrinking its larger retail base here.
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Investing, Long Term Investment, stock market | admin December 31, 2010 | 
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