Bad News

Prepare yourselves for a historical market crash, starting today we are going to experience a continuation of the downtrend of previously unseen proportions. Sadly, on July 11, 2007 I wrote in this blog about some rough times ahead; I did not follow my own advise thinking that it would be a short term correction and remained invested. Here we are fifteen months later and facing a worst case scenario.

If you are long in the market, there's nowhere to go, run or hide, we are going to be punished like never before.

A suggestion, take a deep breath, don't panic and ride the storm. At this time, and for the next two to three weeks (after the election), I would not put any more money in the market. There will be buying opportunities later on.

Best of luck to all of you.
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Funny... However, Sad and True

The following link is worth watching. Hopefully, we'll be able to laugh about it three to five years from now.

http://www.youtube.com/watch?v=UC31Oudc5Bg

Thanks OZ for forwarding it to me.
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KBR Looks Like a Good Prospect

Bottom fishing for value stocks has yielded an interesting prospect, KBR Inc. (KBR).

KBR, Inc. operates as an engineering, construction, and services company supporting energy, petrochemicals, government services, and civil infrastructure sectors worldwide.

Positive factors include:

• Volume at approximately 3.6 million average shares/day
• P/E is at 9.29
• Current price at 66.2% below the 52 week high
• Steady earnings increase since '06
• Trading today at 15.28

We could be seeing a bottom in the price of this stock

Do Not Panic !

The markets have taken a toll on those of us who are invested. This is not a good time to sell in order to keep the little that is left from our capital. If anything, this deterioration in prices create a buying oportunity in selective issues for those who have the intestinal fortitude to risk more funds.

The cycle we are experiencing will weed-out the weak short-term investors and will continue until most of the willing and unwilling sellers are swept away.

A market bottom may be forming and, in twelve to eighteen months from now, we may be looking at a healthy rebound.
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Cash-in on VPHM

Good returns from Viropharma Inc. (VPHM). On October 16, 2007 VPHM looked attractive at 9.57; today at 13.80 that investment shows a 44% gain in just under 12 months.
I'm happy with these results especially in rough markets. At this time, I don't see much upside potential, time to sell.
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FMCN Displays a Good Chart

Chart patterns seem to attract my attention. FNCM has formed a double bottom with support at 23 and broke above its 50 day moving average on August 15. I consider these actions a positive sign.

Focus Media Holding Limited (FMCN) operates out-of-home advertising network using audiovisual digital displays in the People's Republic of China.

Pluses at this time are:

• Volume at approximately 3.26 million average shares/day
• P/E is at 19 (slightly high for my taste)
• Current price at 55.8% below the 52 week high
• Steady earnings increase since '04

Trading today at 29.59, FMCN may be a stock worth taking a second look.

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Something About ALD

Ready to break above short-term overhead resistance, ALD appears to be primed for a move up.

Allied Capital Corporation (ALD) is a private equity company focusing on buyouts, acquisitions, note purchases, recapitalizations, growth capital, and middle market equity and debt investments.

Interesting aspects are:

• Volume at approximately 2.03 million average shares/day
• P/E is at 11
• A dividend of 17.6% (could be cut in the near future, if so we may see a dramatic sell-off)
• Current price at 52.5% below the 52 week high
• Steady earnings expected for '08 and '09
• Insider buying since early June
• A .65 dividend coming up on 9/10/08

Closing on Friday at 14.75, I am willing to call ALD a buy.
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Tail Winds at GE?

At a time of erratic behavior in the market, a safe harbor may be the right choice. General Electric Company (GE) appears to be a good value at these levels, selling today at 28.58.

GE operates as a technology, media, and financial services company worldwide. Its infrastructure segment produces jet engines, turboprop and turbo shaft engines, and related replacement parts for use in military and commercial aircraft; wind turbines; aircraft engine derivatives; gas and steam turbines, and generators; drilling and production systems, compressors, turbines, and industrial power generation equipment; diesel-electric locomotives; and water treatment solutions for industrial and municipal water systems. It also offers financial products and services for aviation and energy sectors, as well as engages in gathering, processing, transporting, and marketing natural gas and gas liquids.

On a long term view, GE is well positioned in the wind turbine sector (alternative energy), water treatment and energy efficient aircraft engines.

At about a 31.3% discount from its highs of late September '07, P/E of about 13, a 4.3% dividend, massive average daily volume, and worldwide exposure and recognition; I would not hesitate to take a long position in the company.
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TKC Could be Forming a Base

Turkcell Ilet (TKC) has been losing ground since its highs of late November '07. After a sizeable drop in value, the stock may be hovering around a short-term support at 15.

Turkcell Iletisim Hizmetleri A.S. engages in establishing and operating Global System for Mobile Communications network in Turkey. The company provides mobile telecommunication services, including mobile voice and data services over its GSM network. Its voice services include wireless telephone services on a prepaid and postpaid basis.

Few of the attractive signs are:

• Volume at approximately 1.35 million average shares/day
• P/E is less than 9
• A dividend of 3.8% (paid yearly)
• Current price at 47% below the 52 week high
• Fund ownership has been increasing during the past 4 quarters
• Earnings have risen consistently since '01

Trading today at 15.85, I would consider TKC a buy candidate at around these levels.

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Time to Drop AINV

Apollo Investment Co. (AINV) has turned south, broke below both the 200 and 50 DMA's in one day. The chart does not look so good.

Holding on to a 5.2% return in less than 4 months, I am ready to let go. Time to sell, this morning trading at about 16.40 down a fraction, new signs of weakness.
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Still Bullish on USU

Six months after comments on this blog about USEC Inc. (USU) and experiencing a 27% "paper loss", we may see daylight sometime in the near future.
An article on "The Motley Fool" is like a breath of fresh air after a period of uncertainty.
http://www.fool.com/investing/dividends-income/2008/06/12/a-big-upgrade-for-usec.aspx
It will be interesting to find out if a contrarian view proves to be on target for the next move on USU.
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AVT Bounces Back

Avnet Inc. (AVT) appears to have enough bouncing power these days to recover from the April 15th 12% drop. Yesterday's closing price of 30.33 could be viewed as a "dead cat bounce", however, the decisive break above the 50 DMA could signal a recovery.

Avnet Inc. (AVT), together with its subsidiaries, distributes electronic components, enterprise computer and software products, and embedded subsystems primarily in Americas, Europe, the Middle East, Africa, Asia, Australia, and New Zealand.

Some of the positive aspects are:

• Volume at approximately 2 million average shares/day
• Reasonable book value
• P/E of just under 10
• Current price at 32% below the 52 week high
• Good fund ownership, increasing interest for the past 4 quarters
• Earnings have risen consistently since '02

This stock could continue its upswing and bring good returns in the next few months.

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Time to unload BEXP

Finally, after two years of weathering painful times, Brigham Exploration Co. (BEXP) has made a solid turn-around and now we are seeing healthy gains.
BEXP was mentioned on 3/28/06 at 9.20, selling today at 14.30 brings us a 55.43% return in 26 months. I'm content with those returns. Time to cash in some gains.
Patience, again, has been rewarded.
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Charting SUG

Southern Union Co. (SUG) has been rising from its lows of mid March and is forming a desirable chart pattern.

SUG, together with its subsidiaries, engages in the gathering, processing, transportation, storage, and distribution of natural gas in the United States.

The chart shows the stock price breaking above the 50 DMA (4/25/08), holding well with a fairly strong move towards the 200 DMA and a the long term declining tops line.

Some of the positive aspects are:

• Volume at 889,000 average shares/day
• Yield of 2.3%
• Reasonable book value
• P/E of just under 15

SUG, trading this morning at 26.42, could possibly add some sweetness to a portfolio.

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EDS Being Bought by HP?

Hewett-Packard Co. has offered to buy Electronic Data Systems Corp. for 25.00 per share in cash. That transaction is expected to be completed by the end of the year.
Under those conditions, we would realize a 10% return in about 12 months from the original price of 22.75 mentioned on October 10, 2007 and a 30.4% gain over the updated comment on May 3, 2008 (10 days ago) when the stock was trading at 19.17.

Fortunate for those of us who were patient enough to hold on, not panic and apply a cost averaging approach during some tough times.
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Is it Time for KBE?

On October 4, 2007, I wrote about Exchange Traded Funds (ETF's). The main focus was on KBE, an ETF investing in large banks. Since then the stock value has dropped 25%, a choice that proved to be much too early for a near term profitable outcome. I have been hanging in there knowing that the negativity in the sector would, in time, reverse its course.

I would tend to think that the bottom is near and expect most banks not only survive but thrive in years to come.

It is not the time to give up, better to wait and add to a long position in order to bring the average cost down and participate in an upswing. Meanwhile, a 6% dividend should keep us in the game and with a price of 40.31 it can be a good place to reload.

An interesting article with an in depth look at KBE can be read at:

http://seekingalpha.com/article/76495-investing-in-banks-the-kbw-large-bank-index?source=yahoo

For those of you who have patiently waited out this deteriorating situation, expect better days ahead.
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Is GVA Ready for a Bounce?

Always searching for value, I like to consider beaten up stocks as mid to long term investments.
Granite Construction, Inc. (GVA) appears to be promising adequate returns in the coming months.

GVA with its subsidiaries, operates as a heavy civil contractor and a construction materials producer for public and private sector clients in the U. S. Some of its projects include construction and improvement of streets, roads, highways, and bridges.

GVA is selling today at about 33.10, 55.6% below its 52 week high; an average daily volume of 888,000 shares, a P/E of 12, insider buying over the last 6 weeks, and may be ready to break above the 50 day moving average (now at 34).

Time to focus on companies that would benefit from an infrastructure upgrade surge which many states, cities and municipalities are in dire need.

Another Big Bang

With bloody noses from yesterday's action in the stock markets, we'd better be ready to face the next round of attacks from the bears.

Having the financial sector in total disarray, the diminishing value of the dollar, world markets taking hits and a recession well on it's way; I can't see any factors that would make the U.S. markets turn around any time soon. The worst case scenario would be a downward spiral, if that turns out to be, then we haven't much of a clue where the bottom could be.

Good luck, don't despair, keep the powder dry.

An Eye on AINV

Apollo Investment Corporation (AINV) could, in the near future, survive and make a turn-around despite the present financial crisis.

AINV focus on investing in the following industries: business services, cable television, chemicals, consumer products, direct marketing, distribution, energy and utilities, financial services, healthcare, manufacturing, media, publishing, retail and transportation.

The positives are: price holding just above the 50 day moving average (dma), trades over 1.3 million shares/day, sells at a 35% discount from its 52 week high, insider buying, yields 12.9% dividends, P/E at 7 and a chart that shows a possible bottom.

The negatives are: financials continuing in a decline and/or a break below the 50 dma.

AINV is selling at about 15.61 and is worth keeping an eye on.

A Look at LHO

LaSalle Hotel Properties (LHO) has been near the top of my list since the beginning of the year, it's time to take a serious look at the oportunity that this company may offer.

LaSalle Hotel Properties, is a real estate investment trust (REIT), which engages in the purchase, ownership, and lease of upscale and luxury hotels located in convention, resort, and urban business markets in the U. S.

LHO is selling today at about 29.62, trades an average of 633,000 shares daily, offers an attractive yield of 7.20%, the number of funds holding positions has increased over the last 3 quarters, has a low book value, the chart may indicate a bottom at around 27, and earnings have increased since 2003.

Expect a sustained rise in price if it breaks above the 50 day moving average at around 31.

Brace Yourselves

If the U.S. market follows the action of foreign stock exchanges, then we are in for some pain.
Expect tomorrow to be one of the worst days and this trend may continue for a week or so.
Wrong time to panic and sell. This could possibly be the worst time if you are long in the market and a good time to start looking at buying opportunities.
So, batten down the hatches, weather the storm and don't panic. Good luck.

Are You Still Holding ASVI?

If you were patient enough to stay with a long position on ASV Inc. (ASVI), then your ship may have arrived. This morning, Terex Corp. announced its intent to purchase ASVI for 18.00 per share, a premium of 46% over the Friday's closing price.

On 10/19/06 and again on 10/31/06, ASVI was mentioned in this blog as an attractive stock, originally selling at 16.60 it seemed to be a value company. The housing industry slow down, lower than expected earnings and U.S. markets sinking rapidly, managed to bring the stock price to 4 year lows. At the time, I chose not to panic and hang in there, it worked to our advantage.

For more information on the possible transaction see the following link:
http://biz.yahoo.com/ap/080114/terex_asv.html?.v=1