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Stock Market News Is Good, So Are You Making Money?

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June 9, 2007

Posted by neillevine

About This Editor: I am a writer. Have been writing for other sites, but expect to do most of my future work HERE! My expertise extends from the esoteric such as burning hydrogen to the unpredictability of the stock market and my writing makes me a jack of all trades and exasperated master of none. I have had some influence over national wildfire and water policy and there are hints of a change in energy policy, BUT as Samuel Goldwyn once said, "A verbal promise is not worth the paper it is written on."

         

A little more than two months have passed since I wrote about The Motley Fool’s stock mentions. I think enough time has elapsed for a simple follow up, although, to be fair, investing should have a longer term perspective.

I started by mentioning the suggestion that Activision, ATVI, at $18.14 a share and Quality Systems, QSII, at $41.91 were undervalued. Well, Activision closed at $18.53 on Friday and Quality Systems was $40.20, small change for both, something of a washout.

Then came Mine Safety Appliances, MSA, a hidden gem. It was $42.73. Friday it closed at $41.66, a small loss for my March article.

Dell, DELL, has gone from $22.83 to $27.84 because news releases such as plans to sell computers through Wal-Mart make it sound like Dell is making progress towards solving its recent sales problems. The number of computers they expect to sell in the first year, 50,000, is a small step for both companies, but it is a step in the right direction. Wal-Mart, WMT, was $47.91 and closed at $50.08 on Friday.

More interesting are their specific recommendations of Netflix, NFLX, $23.75, now $23.43, and CDW Corp., CDWC, the computer electronics distributor, which was $62.43 and is now $84.,97, a very good gain. The explanation is that it is going private at $87.75 a share.

As for my selections, Google was $461. 83. It closed at $515.49 on Friday. Apparently, investors are buying its earnings growth projections. Cisco, CSCO, was $26.19 and is now $26.48. I still believe it has upside potential. Avaya, AV, was $11.88 and is now $17.02, an impressive gain. Like CDWC, it also is going private with an offer of $17.50 a share. Finally, there was Juniper Networks, JNPr, at $18.94 and now $24.50.

On the other hand, Amazon, AMZN, which was $61.33 in my April 30 blog article is now $73.24 because of the increase in analysts earnings projections. However, the current price is 123.22 the trailing twelve months earnings and around 74 times fiscal years 2007 projected earnings of $0.99 making it very risky in my opinion.  

What is ironic is that both the Dow Jones and Standard and Poor’s stock averages are at or near all time highs meaning many stocks are at all time records.   Take IBM.  It hais consistently closed  over $100 per share near its record high, which was during, gasp, the internet bubble.  So most investors, except for those buying at the top, are making money. 

 Finally, there is the News Corp. romance of Dow Jones.  Since only News Corp.’s Fox division is in a position to create a cable network, I do not expect any higher bids than what Murdoch is offering.  Such are the vagaries of being in a strong business position. 

Last 5 Entries by neillevine

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