Archive for July, 2007
Monday, July 30th, 2007
Even if you are a long term investor who doesn’t make a large number of trades, it always helps to be aware of and understand daily events that can move the market. There are a multitude of sites out there that offer daily market information, a calendar of market events, or analysis on the internet. However, when I first set out to find a one-stop shop for this kind of information, I knew that I wanted a credible, unbiased source. I was willing to pay for the service, so long as I felt comfortable with the information provided. So, after reading through Barron’s one day I noticed that Econoday provided the calendar of upcoming events for Barrons.com (I also vaguely remember seeing print versions of the calendar in a local bookstore).
In a nutshell, I gave their online service a try and have been happy with it so far. In addition to a thorough calendar of daily events, the site provides some very good analysis of market fundamentals. The explanation of each data point is no-nonsense and concise, and the focus is on the most important metrics driving the market. From a credibility standpoint I feel comfortable as well, as I consider Barrons.com and Nasdaq.com (also features Econoday data) quality, trusted sources. In addition, the two chief analysts at Econoday (Picker and Rogers) are seasoned economists with a good deal of experience (Rogers spent 19 years working at the Atlanta Federal Reserve, etc.).
Disclosure: EvaluatingStocks.com currently has no formal relationship or partnership with Econoday
Related Links:
Econoday.com
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Monday, July 30th, 2007
Crocs Inc., maker of the trendy plastic shoes I see worn everywhere by kids and physicians alike, has had quite a run lately. After almost a 400% increase in price over the last year, the stock enjoyed another bump last week after reporting a massive 200% increase in 2nd quarter earnings. And, as Georges Yared notes, investors have good reason to be excited: the company enjoys a generous operating margin of around 30% - quite substantial for a young company which is still growing (almost double that of its peers in the footwear industry). In addition, the company has plans to expand its product line to include clothing and backpacks, and has been using capital to make key acquisitions such as the one announced today (Crocs to Acquire Bite Footwear).
Still, at almost $57 a share the stock trades at a very high 39x trailing 12 month earnings. Maybe it’s because I lean more toward value investing, but I have many reservations about paying this much for a stock, especially if it has to do with a trendy apparel item. Further, while insider selling of company stock can happen for a number of reasons, I don’t like to see executives paring their positions. This seems to be the case, as the management team has been exercising options and selling shares in June and July (including the CEO and CFO). The stock may continue its meteoric rise, but I think it is due for some profit taking.
Related Links:
Seeking Alpha: Crocs is a Bona-fide Growth Story
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Sunday, July 29th, 2007
It was a rough week for investing in the stock market, as the major indexes retreated in response to more bad subprime lending news, weakness in the housing market, and a lack of funding for leveraged buyouts (LBOs). The S&P 500 and the NASDAQ fell close to 5%, while the Dow gave up approximately 4% vs. the week prior.
While many fear a decline in LBO activity will doom the markets, corporate earnings and market valuations suggest otherwise. As Andrew Bary noted in the latest issue of Barron’s, the economy is robust and corporate profits are relatively strong. For example, GDP growth in Q2 ‘07 came in above expectations at around 3.4% (up from less than a percent in Q1). Further, at 15 times projected ‘07 earnings, the S&P 500 does not appear overvalued. This suggests the markets may still have upward momentum through the end of 2007.
Posted in Stock Market News | No Comments »
