Good-bye Peet, Hello Glatfelter

Looks like a long time holding of mine, PH Glatfelter (GLT), is joining the S&P Small Cap 600.   It and Coherent (COHR) are replacing Lawson Products (LAWS) and Peet's Coffee and Tea (PEET).  Hope this bodes well for the company's share price and the public's general interest.

I started buying shares of GLT in early 2007, and I've been adding steadily ever since then.  It has done reasonably well providing a nice total return over the years.  I still like them and will likely continue adding to my position for the long-term.

Update: New Portfolio

All orders were filled today, so this new portfolio is off and running.  Here are the purchase prices along with the % weight.

Manitowoc (MTW) -- $14.12 (15%)
Fred's (FRED) -- $14.55 (15%)
Sealed Air (SEE) -- $18.91 (15%)
BJ's Restaurants (BJRI) -- $46.50 (15%)
Paccar (PCAR) -- $41.75 (10%)
Cummins (CMI) -- $114 (10%)
Kelly Services (KELYA) -- $13.90 (10%)
BorgWarner (BWA) -- $79.30 (10%)

I guess I should establish a baseline to compare against, so here are what the major indices closed at today.


Closing Index Prices, 4/23
S&P 500: 1,366.94
Dow: 12,927.17
Nasdaq: 2970.45

New Portfolio

Looks like I've got enough new cash to create a new concentrated portfolio.  I spent a fair bit of time lately going through a good number of companies that were selected from stock screens and also the S&P's Outlook newsletter.

I haven't yet started any positions yet, but here is the list of 8 stocks that I plan on buying in the very near future along with the current price.

Manitowoc (MTW) -- $14.50
Fred's (FRED) -- $14.50
Sealed Air (SEE) -- $19
BJ's Restaurants (BJRI) -- $47
Paccar (PCAR) -- $42
Cummins (CMI) -- $116
Kelly Services (KELYA) -- $14
BorgWarner (BWA) -- $80

I'll give an update after I've established these positions or if I end up grabbing some other names instead. Also, if you have any opinions on any of these companies, I'd love to hear them.

BAMM On My Head

Earnings for Books-A-Million (BAMM) did not come through... the results sent the stock down a fair bit today. After looking at the results and listening to the conference call replay, I'm not yet convinced that I'm wrong about this one, and so I bought a second (and, likely final) piece at 4.07, doubling the size of my position. This brings the cost basis down to around 4.35.

Books-A-Million

Call me crazy, but I think that there may a good deal of value in Books-A-Million (BAMM). For those of you that were in the market ten or so years ago, this name might sound familiar, as their shares shot up when they established an online presence during the crazy bubble days. For those from the South, East, and Midwest, the name should be a familiar one. After all, they are the nation's third largest brick-and-mortar book retailer with around 200 superstores and 30 traditional stores.

Fast forward to today, and surprisingly, the company has survived. It is not worth so much these days (Market Cap ~$73MM at 4.61) despite its current profitability. Also, Borders' recent bankruptcy filing can do nothing but help BAMM. Their numbers, while not the 'let's buy hand over fist' cheap (as was the case when Wet Seal (WTSLA) was trading sub-$2 with $0.95 in cash net-of-debt), seem to indicate undervaluation.

Obviously, growth isn't there right now, and this is going to be a turnaround/survivor story.

Anyway, I also think there is some hidden value in Books-A-Million as well. I'm talking about their equity interest (40% stake) in Yogurt Mountain, which has a presence in some of their superstores as well as in malls, etc. Last year, when the company made its investment, I believe Yogurt Mountain had fewer than 5 shops. Today, I counted 27 locations.

I may be wrong about this, but as I always say... I'm planning to put money where my mouth is. I'm not entirely convinced this is worthwhile, so I'm likely going to start on the smaller side. Even so, the stock is pretty thinly traded, so I'll have to be a bit careful when I do my buying. If shares spike higher for whatever reason before I establish any position, I won't be chasing it.

If you think I'm crazy, please let me know. I would very much like to hear what others think.

----- Edit #1 -----

I just got a partial fill on my initial order, so it looks like I'm now the proud (for now) Books-A-Million shareholder at $4.61.

SunPower Bid

So, last October, I picked up a small piece of SunPower (SPWRA) in the $13-14 range. Today, the major French energy company, Total (TOT), announced that it would buy 60% of the company for $23.25 a share.

Too bad I did not buy more, but it's still a nice pop. Maybe it's time to exit this one and find a new home for the cash. I suppose that gives me something to think about it this weekend.

Adding to Cameco Position

Roughly a year ago, I purchased shares of Cameco (CCJ), one of the largest nuclear energy companies around, in two batches at around $27 and $28. Shares appreciated nicely up until last week when Japan suffered a major earthquake. Not surprisingly, nuclear energy stocks across the board have been pummeled following the nuclear reactor problems and concerns that resulted from the quake.

I remain convinced that nuclear energy won't be going away any time soon, and I do believe that once the panic subsides, shares should return to favor.

True to my nature, I'm putting money where my mouth is, and I've added substantially to my current CCJ position. I've a little more than doubled the position with new shares purchased at the $30 level.

Quick Update

Covered the Form Factor (FORM) short at 9.56. No plans on doing much else for now.

Quick Update

Well, Form Factor (FORM) jumped on Friday, and I'm no longer long it. Always nice to make some cash. In what may prove to be a dumb move, I did end up shorting a small piece at 9.73, but I'll get out if it breaks 10.

Greetings!

Picked up a piece of American Greetings (AM) at 21.97. The company has a number of domestic greeting card brands (Papyrus, Carlton Cards, ...) as well as a few internet-based brands (BlueMountain, Egreetings, ...). What got me interested was the 2.5% dividend yield and what looks to be reasonably good value on an earnings basis. The company announces its quarterly earnings tomorrow, and I figured I'd pick some up ahead of it. Adding this to the long-term portfolio... it's not intended to be a pure trade.

Quick Update

Purely a trade following yesterday's sell-off... grabbed a block of Form Factor (FORM) at 8.90. Will exit on any significant pop. The company is sitting on a lot of cash without debt, so despite its problems, I am willing to sit on it for a little bit. Time will tell if this is a boneheaded trade or not.

Portfolio Update and Vanguard Index Fund News

Added a small position in SunPower (SPWRA) at 13.72 to the long-term portfolio. The company's stock has lagged its major competitors over the past 1-2 years, and I believe it's worth taking on some risk for a decent return if the company can continue to stay on track earnings-wise. Also, recently the company has reported some news suggesting that it is becoming more cost-competitive. All in all, as we approach year-end, 2010 is looking reasonably good and if the positive trend, I think we can see shares moving north of $16 by early next year.

Now, for Vanguard news... anyone that holds index funds through Vanguard should look into converting their Investor shares to Admiral shares. The Admiral share minimums were recently reduced to $10K (down from $100K). Admiral shares are much more cost efficient, as they carry an expense ratio that is roughly half that of Investor shares.

Another Quick Update

Sold Research In Motion (RIMM) Oct $52.50 calls for 0.53 against the Oct $50 calls I bought earlier this week at $1.20.

This means that I've effectively established a Bull Call Spread $50-$52.50 at a price of $0.67.

Excluding commissions, etc...

Break-even at $50.67
Max Loss (-$0.67) at $50 or below
Max Gain (+$1.83) at $52.50 or above

Quick Trade

Bought some Oct $50 Research In Motion (RIMM) calls for 1.20 in anticipation of any positive announcements to come out of their developer conference (specifically the so-called 'Black Pad'). Didn't buy a large amount or anything, so it's fairly small risk. But, if shares move, then it could pay off nicely.

Sold Some Calls and Arena Update

Sold Linear Technology (LLTC) August $33 Calls at 0.50 (covering the entire position).
Sold Cisco Systems (CSCO) August $24 Calls at 0.43 (covering 3/4 of the position).

I am willing to buy the calls back at a loss if the stocks move above the strike price, but within reason, come expiration day.

And, it turns out that the market sees the Vivus (VVUS) FDA setback as a positive for Arena Pharmaceutical (ARNA). Shares are now at their 52-week high, $5.91. Just three weeks ago shares were trading near $3.

Down She Goes

Looks like FDA advisory panel rejects Vivus' drug, Qnexa. Arena Pharmaceuticals (ARNA) shares gave back all of its gains today plus some. If this were a big position I'd be kicking myself big time for not dumping it when it was up 30%. What a wild day for ARNA: Day's Range = 3.57 - 5.72.

Arena Pharmaceutical Pop

Shares of Arena Pharmaceutical (ARNA) got a nice pop today (up 30% at the moment) following yesterday's announcement that the New England Journal of Medicine would be publishing positive results of the two-year BLOOM (Behavioral Modification and Lorcaserin for Overweight and Obesity Management) trial. From what I read, the safety profile for Lorcaserin was better than that of current drugs used for obesity treatment, such as Xenical.

Additionally, one of Arena's main competitors, Vivus (VVUS), is currently awaiting the recommendation by the FDA advisory panel. That result should be coming out later today.

In any case, I don't have a large position in ARNA. But, it's still nice to see such a move in the stock.

Quick Update

Added shares of Cisco Systems (CSCO) at just under $23 today. Will likely hold on to the shares for some time.

Quick Update

Bought back the Wet Seal (WTSLA) shares I sold a month ago plus some (roughly same dollar size at a 13.5% discount). Order filled at 4.37.

Options Expiration Day: The River

Forgive the poker analogy, but it looks as if I got rivered with the Goldman Sachs (GS) puts I sold last month. Looks like I'm going to be the proud(?) owner of GS shares at an effective cost basis of $169.90 after today.

In case you haven't checked the news, the SEC charged Goldman with fraud today sending shares down to the $160-165 level.