June 16, 2010 200 and counting

BAGAKOAA June 16, 2010 200 and counting

Well last night’s post was the 200th post of The Salve Lucrum Blog, since the middle of October 2009. That is ALMOST one a day. Proof I have no life.

Follow the Linkage

Sorry none today. I was really looking too and again it’s hard to make a separation of 3 links from a piece of news to a good stock play. I read a lot about Boeing tonight thinking I could make a third degree separation from the 737 production increase to their key suppliers to sub supplier or commodities.

No such luck. Here are key suppliers to Boeing who might see a pop because of BA production boost and there are some very sound stocks on the list. Mitsubishi, Kawasaki, Honeywell, General Electric, AZX International Corp., (Private I think), Bridgestone Corp., Cytec Engineered Materials Inc., (Private but keep an eye on them),Deharde-Maschinenbau H. Hoffmann GmbH a German company and no ADR that I could find, and Frontier Electronics Systems Corp., (Private).

The only other linkage, I would have to give Cramer credit for and that is the impact of the banking regulations and how it might make a huge play for Barclay’s and Duetche Bank. That is news not linkage since the Lenin look alike did ten minutes on it last night.

Under the category of "Damn I’m Good", the market did pretty much as we had indicated on Sunday night. We said housing starts would be off. We estimated 600-610M against a forecast of 650,000. The number came in at 593,000 units and much to my surprise by the end of the day, the market took the news with little volatility. We also called the beat by Fedex, ($1.33 vs $1.32) but the CEO had some wet blanket forward looking comments concerning their pension plans to take the stock down.

 Happy news for AAPL holders today. AT&T were beating customer off with a stick today selling more than 600,000 units of the iPhone 4G. It actually crashed (the say they shut it down) their servers. So AT&T can’t hand calls or internet traffic. AAPL was up almost 3% today.

 We did add to our UNG position on a dip early in the day and picked up some more FLS on the 1.2% dip today. Remember to ease into your positions in this WTF market. (Thanks Megan I stole that from you now that I know what it means. For those people who live under the rock with me WTF means What The &*@%)

Since I had no linkage to discuss today I will leave with a nice wine tip. Last night Devin and I enjoyed, well we ate, some meatloaf premade by our grocer who will remains nameless PAVILLIONS. It was far from the best meatloaf I have ever had but scads better than the gasoline fumed stuff my mom used to make. Don’t worry she does not read the blog, she passed in 1992. Anyway I was in the mood for a big cab and have been learning more and more about the Yakima/Walla Walla area of Washington State. I chose a 2003 Woodward Cab and it was incredible. Deep dark black purple in color. Clingy and thick on the glass, almost jammy. (I know, not a word, made it up) On the nose there was a smoky meaty smell, some florals but not exotics more like wild flower type smells kinda like a potpourri type of thing. In the mouth, it had some spice and earthy tones to it as well as the currant dark berry taste you would expect. It was terrific. I’d have to give it a 91. The meat loaf got a 43, but the wine was knock your socks off. If you see it, get it. The 2003 I had to get at auction (winebid.com) but I will be looking for the vintner from this point forward.

Speaking of auction, yesterday a 1937 bottle of Glenfidich Single Malt went for 37,000 Pound Sterling to an anonymous bidder and I just wanted to say thank you to who ever it was for remembering my birthday next month, July 20th. What a thoughtful gesture.

Salve Lucrum

BAGAKOAA June 8, 2010 I’m goin’ up, I’m goin’ down

BAGAKOAA;

June 8, 2010 I’m goin’ up, I’m goin’ down


Mathis James, “Jimmy” Reed must have written the song, “Baby What You Want Me To Do”, for a day like today. The rest of that verse goes “I’m goin’ up down round oh baby where you want me to go, yeah, yeah, yeah.” Well, that is what the market did today, passing the centerline more than 13 times before finding some positive energy in the last hour of trading. The techs stayed moribund, but the DOW and S & P were both up about a point.


Nice comments about the economy by Uncle Ben Bernanke may have been the catalyst to get the number up a bit and the small business optimism report was optimistic. Despite my comments to the contrary on Sunday night, there was some equity news today that helped the market. Dollar General, had strong top line and bottom line figures. And MCD was up more than 2% today as same store sales were impressive. It made me glad we have been collecting the stock on the dips.


Cramer was out pimping the good news about McDonalds today in his Action Alert Newsletter, (one of the best for the money), and he had some interesting insight into MCDs growth in Europe and Asia. With a yield of 3% or better, it might be one to add to your pouch if you don’t have any.


We took advantage of the early dips in the day to pick up more AAPL, INTC, UNG on its first drop in several days, BA and FLS. Other than that today was a day to sit on the rail and watch the rodeo, while making sure your name wasn’t called to get on the big bull or big bear or was that a bull?


I did a reality check today and looked at our realized gain or loss since January first. The Salve Lucrum portfolio was down .3% also know as flat. A little disappointing but not bad.


Salve Lucrum

BAGAKOAA June 3, 2010 Great Minds Think A Like

BAGAKOAA;

June 3, 2010 Great Minds Think A Like, or do they just read my blog?


I have to tell you I am so excited. I just watched today’s Mad Money and, well I think Cramer must have read my blog. Ya see I have been tagging my blog with the key words. Yesterday I did the spiel about oil, oil storage, and Natural Gas. Cramer did a whole segment on Nat Gas because on Tuesday, yes I missed it, our very own President Obama said, “. . . advocate for rolling back "billions of dollars in tax breaks to oil companies," expanding the nation's fleet of nuclear power plants and tapping into natural gas reserves,” This is one of the first up front statements he has made in support of Nat Gas. He will get behind the Clean Energy bill, and if this guy can pass the piece of crap legislation like the health bill and the yet to be defined financial regulation bill, even I think he can pass a sensible clean energy bill. Face it, not too many senators or congressman are going to stop a clean energy bill while we sit at the dinner table watching oil covered pelicans being pulled from oil gunked up marshes every night for the next 6 months. It will pass. Maybe Obama read my blog as well the night before and that is what got him behind the clean energy bill, yeah that’s the ticket.


Enough about me. How do we make a buck with this speculation? Well, again Cramer had a couple of good names and as usual some good logic behind the names. Remember I don’t usually care for many of the stocks he calls, but I always respect his logic. Today he had two to take a look at.


WPRT, Westport Innovations Inc. the research, development, and marketing of engines and fuel injection systems that use gaseous fuels, including natural gas, liquefied petroleum gas (LPG), hydrogen, and hydrogen-enriched compressed natural gas for the on-road commercial vehicle sector primarily in North America and Asia. The company offers engines utilizing gaseous fuels for transit and shuttle buses, conventional trucks and tractors, and refuse collection trucks, as well as specialty vehicles, such as short haul port drayage trucks, material handling trucks, street sweepers, and vehicles for selected industrial applications; direct injection LNG system for heavy-duty trucks; and engines fuelled with LPG primarily for the OEM forklift market. It also provides alternative fuel engines, and relevant parts and kits for use in automobiles, heavy duty trucks, power generation, and shipping applications; and cryogenic tanks for compressed natural gas or liquefied natural gas. The company was founded in 1995 and is headquartered in Vancouver, Canada.


CAUTION, this company has never made a profit. It has plowed every dollar earned and more into R & D and future growth. They were the first to put LNG buses on the roads of China. Even china was smart enough to know there is not enough oil to fuel their future growth. The clean air act will provide incentives to companies and municipalities to utilize clean energy fuels. Please read all you can on Westport BEFORE investing. I am going to initiate a small position tommorow at 17ish. I first looked at this stock in January when the CEO was on Mad Money. I almost pulled the trigger at 10.75 a share. The lack of free cash flow scared me away. I am feeling better now. The President is now talking about Nat Gas. I think its time to get on the bus.


Mad Money also talked about MDR McDermott International, Inc., through its subsidiaries, operates as an engineering and construction company worldwide. It operates in three segments: Offshore Oil and Gas Construction, Government Operations, and Power Generation Systems. The Offshore Oil and Gas Construction segment engages in the front-end design and detailed engineering, fabrication, and installation of offshore drilling and production facilities; and installation of marine pipelines and subsea production systems. It also provides project management and procurement services. In addition, this segment operates a fleet of marine vessels used in offshore construction and various fabrication facilities. The Government Operations segment manufactures and supplies critical nuclear components, fuels, and assemblies for government and commercial uses, as well as provides various services, including uranium processing, environmental site restoration services, and management and operating services for various U.S. Government-owned facilities primarily within the nuclear weapons complex of the U.S. Department of Energy. It also supplies research reactor fuel elements for colleges, universities, and national laboratories; offers uranium-based products used for medical isotopes; and converts or downblends high-enriched uranium into low-enriched fuel for use in commercial reactors to generate electricity, as well as provides heavy fabrications for industrial use, including components for defense applications. The Power Generation Systems segment supplies fossil-fired boilers, commercial nuclear steam generators and components, environmental equipment and components, and related services. It designs, engineers, manufactures, constructs and services utility and industrial power generation systems, including boilers used to generate steam in electric power plants, pulp and paper making, chemical and process applications, and other industrial uses. The company was founded in 1923 and is based in Houston, Texas.


The company has exposure in every segment of logical energy choices. It engineers and installs fossil fuel to gas conversions in plants and factories. It should be a prime beneficiary in any clean energy bill. I am looking at a small beginning position in the 20s tomorrow. Again read and do your homework on this one. Fundamentals on this one are much more impressive. Annual growth like WPRT is impressive, but they have a great margin, no debt and their Return on Equity is enviable. They forward looking multiple is 10 which makes it affordable.


UNG and FCG are two other ways to play a gas speculation. FCG is an index fund of a group of companies that derive most of their income from the exploration and production of Natural Gas. It is kind of like a mutual fund of Natural Gas producers. Some of its top holdings are Mariner Energy, Cimarex, Pioneer, EOG and Ultra Petroleum.


UNG, on the other hand is a prue commodity play via this ETF. It trades in relation to the near term futures of Nat Gas on the NY Merch Exchange. These are future contratcts not spot prices so keep that in mind.


The portfolio has owned both and I personally prefer the commodity priced UNG. It is up about 8% since President Obama added the words Nat Gas to his vocabulary. At 8.00 a share, I am getting in and this will be a 12-24 month play good or bad. It will take at least 3-5 years to get a meaningfull mass of LNG users, but then you should see the commodity go from its current $4-5 per million CF to 8-10. This ETF should see 20ish in two years.


Salve Lucrum and if I don’t post tomorrow, have a great weekend.