Recent Takes
Just now
Microsoft Corporation is one of the largest computer software company’s and a leader its industry. The company is divided into five divisions and they are the following;
1) Client = is responsible for the technical architecture, engineering and product delivery of the Company’s Windows product family.
2) Server and Tools = Server and Tools develops and markets software server products, services and solutions.
3) Online Services Business (OSB) = consists of adCenter as its on-line advertising platform with offerings for both publishers and advertisers, personal communications services, such as e-mail and instant messaging, online information offerings, such as Live Search, and the MSN portals and channels worldwide.
4) Microsoft Business Division (MBD) = offerings consist of the Microsoft Office system and Microsoft Dynamics business solutions. Microsoft Dynamics products provide business solutions for financial management, customer relationship management, supply chain management, and analytics applications for small and mid-size businesses, large organizations and divisions of global enterprises.
5) Entertainment and Devices Division (EDD) = is responsible for developing, producing, and marketing the Xbox video game system, including consoles and accessories, third-party games, games published under the Microsoft brand, and Xbox Live operations.
With such an impressive arsenal of products going for them, Microsoft can be considered a huge ATM machine for free cash flow. To be more specific, the company is expected to generate $15.2 Billion in free cash flow in 2009 (during a recession) and if you relate that to its total capital employed, that comes out to a free cash flow to total capital ratio of 37.8%. To put that into perspective, for every $1 of capital employed they produce about 38 cents of free cash flow. With most companies averaging 5% free cash flow to total capital employed you can clearly see that Microsoft does about 700% better in this key area. That is why FireRock Research has a accumulate rating on the stock with a FireRock Element® of $53.27. The stock also trades at about 10 times its price to free cash flow, which makes this a potential investment with long term capital appreciation through strong capital preservation.
Just now
PetMed Express, Inc. is a leading nationwide pet pharmacy. The Company markets prescription and non-prescription pet medications and other health products for dogs, cats, and horses directly to the consumer. The Company offers consumers an alternative for obtaining pet medications for convenience, price, and speed of delivery. The Company markets its products through traditional, online media, and mail/print advertising campaigns. Those marketing campaigns aim to increase brand recognition of “1-800-PetMeds”, increase web traffic at www.1800petmeds.com, optimize customer acquisition, and maximize repeat purchases.
As of March 31, 2008, its product line contains approximately 750 stock keeping units (skus). These products include brand name medications such as Frontline Plus, K9 Advantix, Advantage, Heartgard Plus, Sentinel, Interceptor, Program, Revolution, Deramaxx and Rimadyl. Additionally, the Company’s products included Non-Prescription Medications (OTC), which include flea and tick control products, bone and joint care products, vitamins and nutritional supplements, hygiene products, and Prescription Medications (Rx), which include heartworm preventatives, thyroid and arthritis medications, antibiotics, and other specialty medications, as well as generic substitutes.
PetMed Express offers the same medications that anyone can find in their local veterinary clinic, but at a deep discount from the regular price. Add a strong FireRock Element® to a strong anti-recessionary business model and you have a potential winner at hand with Pet Med Express.
Just now
Double positive. Company raised dividend, announced share buyback, positive tidings, strong management. Long thru $120
This week
Sell it all, GM is going next. Great time to short this before it goes all the way to zero. Chrysler will be proof of concept
Recently
China materials demand driving demand for big buckets and mining. This stock has huge backlog of orders.
This week
Great company, perfect recession play as people stop buying new cars and focus on fixing up old ones. The top operator in this field.
This week
Double negative on U.S. Steel. Cuts dividend, announces fast moves to raise cash, very scary for investors. Get out now.
Just now
Research in Motion Limited (”RIMM”) is a leading designer, manufacturer and marketer of innovative wireless solutions for the worldwide mobile communications market. Through the development of integrated hardware, software and services that support multiple wireless network standards, RIMM provides platforms and solutions for seamless access to time-sensitive information, including email, phone, text messaging (SMS and MMS), internet and intranet-based applications. RIMM technology also enables a broad array of third-party developers and manufacturers to enhance their products and services with wireless connectivity to data. The company’s products include BlackBerry smart phones and accessories, including cases, audio products, memory products, Bluetooth, chargers, batteries, and card readers. It also provides, SureType, a keyboard technology, which allows users to compose messages using single-handed operation or two-handed thumb-typing. Additionally, SurePress provides a touch screen technology that helps in navigation and typing. Its products provide access to time-sensitive information, including email, phone, short messaging service, internet and intranet-based applications.
RIMM’s portfolio of award-winning products, services and embedded technologies are used by thousands of organizations around the world and include the BlackBerry wireless platform, BlackBerry smart phones, software development tools, radio-modems and software/hardware licensing agreements. Founded in 1984 and based in Waterloo, Ontario, RIMM operates offices in North America, Europe and Asia Pacific.
RIMM has one of the best percentage ratings in our FireRock Database at 35%, which gives it an opinion of strong accumulate. With a FireRock Element® valuation of $197.98 per share, RIMM has a long way to go before it becomes fully valued. In 2009 and 2010, we estimate that the company will create about $2 billion in free cash flow per year, with a current market capitalization of $21 Billion. This is a company that has zero debt on its balance sheet and its free cash flow to total capital employed comes in at over 20%, we see RIMM as a strong position for any portfolio. It is expected that RIMM will grow their revenues at a 30%+ clip going forward.
This week
Double positive. Heidreck Struggles took huge hit, could get worse, but big upside in economic recovery as jobs return
This week
Isle of Capri Casinos Sell-Short recommended two days ago, has been Stopped-Out by our 8% Stop-Loss (Buy-Cover) order. Small loss.
Just now
Coach was originally acquired by Sara Lee Inc. in 1985. In October of 2000 it decided to sell 7.38 million shares to the public at $16 a share followed up by its distributing the remaining shares of the company to shareholders. Starting with 170 stores in 2000, management was able to grow the total amount of stores to 399 in just eight years. Management grew the store count at an annualized rate of 11.25% with little or no debt. The company’s stores are mainly concentrated in 5 major states and Japan, and can grow its store count 10 fold before it reaches a level of saturation.
Coach Incorporated (NYSE : COH) is a specialty retailer that is the dominant player in the ladies handbag industry. Founded in 1941, the company sells its merchandise in some 399 company owned stores of which 107 are Coach factory stores. The company’s stores are mainly in the USA and Japan (149 stores) but can also be found in 24 other countries (167 stores) as well. The Coach trademark is highly respected throughout the world and is seen as a status symbol. Besides its company owned stores, Coach also acts as a wholesaler to over 900 department stores and specialty shops including such names as Macy’s, Dillard’s and Sak’s. 62% of sales come from the sale of handbags and the remaining 38% come from accessory sales such as Movado watches, Jimlar footwear and Marchon eyewear. In the current market environment shares of Coach have fallen 74% from its all time high of $54 a share which was achieved in 2007 and has created the buying opportunity of a lifetime.
take a further dive and see other Elite Elements....
http://www.firerockresearch.com/elite-elements/