Tuesday, September 26, 2006

More Stock Talk

Today was a mixed bag for the Long-Term portfolio. The two largest positions, Harrah's (HET) and Altria (MO), fell today. Harrah's dropped sharply due to a JP Morgan downgrade and accompanying earnings estimate cut. Altria continued to fall today following yesterday's unfavorable ruling on the Schwab case. However, the losses were offset by strong gains elsewhere in the portfolio.

Four stocks in the portfolio set 52-week highs today: Abercrombie and Fitch (ANF), American Eagle Outfitters (AEOS), Constellation Brands (STZ), and International Gaming Technology (IGT). Additionally, Eastman Kodak (EK) made a big move today as well. Maybe this next quarter's earnings release won't be as disappointing as ones we've seen recently. Other strong performers include Fortune Brands (FO), Student Loan (STU), and Apple (AAPL).

The trading portfolio was a bit of a downer today with Broadcom (BRCM) and Multi-Fineline (MFLX) both falling.

This brings me to what I've been looking at recently as potential buys for the long-term portfolio.

Universal Corporation (UVV) - UVV was first mentioned here. I believe the reasons that got me interested are still in play, and the stock has pulled back a bit now and is once again entering an attractive range.

Lifetime Brands (LCUT) - Lifetime Brands sells a broad range of kitchen products. You might have heard of such brands as Cuisinart, Farberware, or KitchenAid. I've been watching this one for a while, but never did get around to mentioning it. But, today the stock fell and I think it's time for us to all give it a hard look.

The drop today really brings its price to an attractive level. It might continue to make some new lows, and if it does, I'm going to start buying. At current prices, the shares trade at 13.2x 2006 earnings (using the low end of the $1.45-1.55 EPS range provided by the company in their latest announcement). This represents 18% year/year earnings growth. The shares are also currently yielding 1.3%. So, in short, I'm still waiting for a better price, but we're really close to levels where I'll begin pulling the trigger.

A couple weeks ago, the Inelegant Investor blog had a write up on the company. I do agree with much of what is said there. Have a look if you're considering this as an investment.

No comments: