We wanted to spend a little time talking about some of the
stocks we own in our portfolio and why we like them. We will focus on 3 stocks this week and will
do similar write ups in the coming weeks.
This will help you understand some of the reasoning in our selections. We are not telling you to buy these stocks just
pointing out why we did.
NOV – National Oilwell Varco, Inc: This is an energy stock in the oilfield
service and equipment industry. We like
this industry and think it is a good place to be with the recent volatility of
the markets and uncertainty on where we are heading. The Earnings Per Share have steadily
increased over the last couple years returning .88 cents in 05, $1.94 in 06,
should come in around $3.75 this year and is estimated around $5 in 08. The Net Income has been more than doubling
since 04 and should do the same this year.
The PE Ratio is a little high compared to others in its industry but not
high enough to concern us. George Soros
is an investor in this stock and it’s always good to have the proven winners in
your corner. If you follow Investor’s
Business Daily this stock is listed as an A+ by them and was #37 on the IBD 100
last week.
EBAY – eBay: eBay is high on our industry ranking list
coming in at #4. Our Return on
Investment (ROI) Estimate for eBay is 14.59%, which means you should come close
to doubling your money in 5 years. The
previous quarter looked great and with any luck they will start to get more out
of Skype and PayPal in the upcoming quarters.
eBay has been stuck in the mud for the last 3 or 4 years along with a
lot of other technology companies. The fund
managers and professional traders have been consistently talking about
technology as one of the better sectors to be in going forward and we couldn’t
agree more. Prince Al-Waleed has a stake
in this stock as well, which is good to know.
GE – General Electric Co.: While this stock might seem a bit boring, we
think it has a good chance to double in the next 5 years. I don’t know about you but doubling my money
is not boring! GE pays a nice dividend
that’s just over 3% and of course is a great global play if the economy does
slow down in the US
with all of its international exposure.
One thing you love to see in a stock is when insiders are buying
it. GE has seen some insiders purchasing
the stock this year. Jeffery Immelt has
purchased close to $5 million, Claudio Gonzalez picked up 1.5 million and Alan
Lafley bought over ½ a million in GE stock.
This might be pocket change to them but they purchased the stock none
the less and I don’t know anyone that enjoys losing money! One thing that caught our eye when we were
reviewing this stock was the MACD line.
If you are a technical trader it looks like the MACD line has bottomed
out and has crossed over the signal line.
This can be a positive indicator for stocks that do this.
We hope you enjoyed a little look into how we
select stocks and some of the items we are looking for when selecting
them.