Archive for March, 2009

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Buzz Stock of the Day: Pentair (PNR)

Tuesday, March 17th, 2009

Last month, Sterne, Agee & Leach analyst Michael Coleman raised his price target to $23, from $20 for the Minneapolis-based Pentair, Inc. (NYSE: PNR).

Coleman stated in a note to investors that Pentair, which manufactures water treatment and storage systems for customers around the world, “is better positioned than many industrial companies to achieve relative earnings outperformance in 2009 due to significant (and early) restructuring actions taken year-to-date and in (the fourth quarter).” Management expects its cost-cutting measures from workforce reductions alone to produce annual savings of $85 million starting this year, growing to $95 million to $100 million in 2010.

Pentair has a trailing P/E of 8.7, which is below the industry average of 9.1–a possible indication that shares may be undervalued at current levels. The company’s stock outperformed S&P 500 over the last year. Pentair has an operating margin of 11.6 percent, which is in line with several of the company’s competitors’ operating margins. Pentair also pays a dividend, which it has regularly increased for more than three decades. The company’s full-year guidance calls for earnings between $1.70 and $2.00 per share.

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Posted in Industrial Stocks | No Comments »

Buzz Stock of the Day- Buffalo Wild Wings (BWLD)

Monday, March 16th, 2009

Here’s a pretty funny commercial for our Buzz Stock of the Day’s restaurant chain.

Cold beer, hot wings, and sports are usually key ingredients for a good time–especially in places where there isn’t all that much to do.

Buffalo Wild Wings, Inc. (Nasdaq: BWLD) runs 567 sports bars/restaurants in 39 states. As expected, the company’s restaurants attract sports fans, a group that seems to be spending money despite recessionary pressures. The Minneapolis-based Buffalo Wild Wings, reported a 33 percent boost in Q4 revenue, outstripping the verage 18 percent gain of companies in the hotels, restaurants, and leisure industry. Net profit climbed 29 percent, and EPS have increased year over year in the past eight quarters. Same store sales (a key metric for companies in the restaurant industry) at company owned restaurants increased 8 percent in January, and sales at franchise locations were up 7 percent.

“At some point it seems battle-fatigue sets in and, as a protective conditioned-response, consumers look for an escape,” said Morgan Keegan analyst Bob Derrington in a note to investors. “Restaurant dining can provide that escape.”

Derrington stated that although traffic at restaurants may be down, compared to a year ago, same store sales, or sales at stores open at least a year, are holding up relatively well.

Consumers’ desire for comfort and an escape from the daily drudgery could result in continued growth for Buffalo Wild Wings. Shares of BWLD are up about 71 percent over the past 12 months. The company has an operating margin of about 9 percent, and had operating cash flow of $66 million, on revenue of $422 million (ttm).

Can 2009 be another break out year for BWLD?

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Posted in Consumer Discretionary Stocks | No Comments »

Buzz Stock of the Day: Energy Conversion Devices (ENER)

Friday, March 13th, 2009

The majority of analysts that cover Energy Conversion Devices (Nasdaq: ENER) rate the stock a “hold,” and for good reason.

Market adoption for the company’s photovoltaic thin film technology is growing. The light-weight, flexible laminates are “ideal for commercial and residential rooftop and building integrated PV installations, both of which offer significant growth opportunities,” according to Raymond James (NYSE: RJF) analyst Pavel Molchanov, who has a $37 price target for ENER and projected an EPS growth rate of 25 percent over the next three-years.

ENER could also be one of the big winners from the Obama administration’s stimulus plan. New federal incentives will allow many Americans to immediately lower the price of electricity by installing solar panels on their rooftops, and recoup 30 percent of the installation costs through U.S. treasury grants.

Market sentiment for the Energy Conversion Devices’ prospects is positive, as well. According to the Motley Fool, roughly 93 percent of CAPS members were bullish on ENER, despite the fact that the company cut its June fiscal year revenue guidance from the $455 million to $485 range to a range in the low $400’s.

Shares of ENER are actually up on a trailing-12-month basis, and have outperformed the S&P 500 over the last . The Company has a 67.6 percent gross profit margin, a 7.3 percent return on equity (yoy) and is sitting on about $433 million in cash.

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Posted in Energy Stocks, Technology Stocks | 1 Comment »

Buzz Stock of the Day: Jacobs Engineering Group (JEC)

Thursday, March 12th, 2009

We love movie trailers, so here’s one for our Buzz Stock of the day:

Jacobs Engineering Group (NYSE: JEC) provides technical, professional, and construction services to industrial, commercial, and governmental customers around the world. The $5 billion company has an operating margin of about 5.6%, and operating cash flow of $539 million.

The Motley Fool listed Jacobs as a stock for the next Great Depression. A key characteristic for these companies to have is the ability to stay out of the debt crisis that’s bringing sectors like finance, automotive, and homebuilding to their knees, according to the Fool.

Jacobs is in a sweet spot of the market–infrastructure–has a definite tailwind, and could be one of the big winners from the new administration’s stimulus plan.

Jacobs reported earnings of $116.4 million, or $0.94 a share in Q1 2009, up more than 18 percent compared with the same quarter last year. The company also increased its backlog by more than $1 billion from a year ago. Jacobs was listed as one of our Top 10 stocks to own in 2009, and we stand by our claim. Expect Jacobs to be one of the big winners of President Barack Obama’s stimulus plan, and out perform the S&P 500 this year.

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Posted in Industrial Stocks, Materials Stocks, Technology Stocks | No Comments »

Buzz Stock of the day: Kinder-Morgan Energy Partners (KMP)

Wednesday, March 11th, 2009


RBC Bank’s Joseph Keating recently summed up Kinder Morgan Energy Partners (NYSE: KMP) in three words: exceptionally high quality.

A “high-class [company] in the pipeline arena,” according to Keating, Kinder Morgan has a dividend yield of 8.4% and a 19.1% return on equity over the last three years.

We love this stock because it has a pretty well-shielded dividend, and performance doesn’t hinge on commodity prices. Regardless of what oil costs, it still has to be moved. That’s where KMP comes in. If you’re looking to add an energy component to your portfolio, Kinder Morgan is definitely an option worth considering.

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Posted in Energy Stocks | No Comments »

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