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Quotes delayed at least 20 minutes. To track performance in Jubak's Picks fairly, the "Price Then" displayed is the closing price on the date each add/drop was made. Until we have a closing price on the first day of the pick, we display the previous day's close as a placeholder.
| Company |
Symbol |
Date
Picked |
Price
Then |
Price
Now |
Today's
Change |
Jubak's
Gain/Loss |
| Chesapeake Energy Ord Shs |
CHK |
4/22/08 |
$53.68000 |
$55.96 |
unch |
4.25% |
Yes, I know the stock has just hit a new high, but I think there's still room to run in the shares of this natural-gas producer. Natural-gas prices have trailed oil-price increases, but they are moving in the same direction -- up -- as energy-hungry economies in Europe and Asia bid for limited supplies. (See below on the price squeeze in liquefied natural gas.) And Chesapeake Energy (CHK) will score big from these price increases. The company has spent $11 billion over the past five years to acquire new oil and natural-gas reserves. And because Chesapeake owns its own drilling rigs -- that's extremely unusual in an industry that usually hires its rigs from drill operators -- the company has been able to move full speed ahead on increasing production without a big jump in drilling costs. Oil and natural-gas production climbed 34% in the fourth quarter of 2007, and Wall Street has increased its estimates of production growth for 2008 to 20% from the earlier 10%. As of April 22, I'm adding Chesapeake Energy to Jubak's Picks with a target price of $62 a share by December 2008. This purchase will leave the Jubak's Picks portfolio about 37% in cash. (Full disclosure: I own shares of Chesapeake Energy in my personal portfolio.)
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| US Bancorp Ord Shs |
USB |
4/11/08 |
$32.62000 |
$34.36 |
+$0.16 |
5.33% |
The top-line news was good when US Bancorp (USB) reported first-quarter earnings April 15. The bank beat Wall Street's lowered expectations by 3 cents a share. In addition, it saw revenue climb 14% from the first quarter of 2007 to beat Wall Street projections of $3.66 billion by roughly $210 million. But it's the numbers further down in the report that show how this bank is taking advantage of the turmoil in the rest of the banking sector. Compared with the fourth quarter of 2007, average interest-bearing deposits climbed by 3.3%, and the net-interest margin climbed by 4 basis points (100 basis points equal 1 percentage point). The bank did announce a $253 million charge related to structured-investment vehicles, but the bank continues to show less exposure to the debt-market crisis than its peers. As of April 18, I'm raising my target price to $44 by December 2008 from the prior $43 target. (Full disclosure: I own shares of US Bancorp in my personal portfolio.)
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| Kinross Gold Ord Shs |
KGC |
4/4/08 |
$23.36000 |
$19.25 |
-$0.46 |
-17.59% |
Gold has plunged from well more than $1,000 an ounce to about $900, and shares of Kinross Gold (KGC) have sold off by roughly 15% since I sold to take profits at the beginning of March. Now I think it's time to put this trade on again. Gold sold off on a climb in the dollar and a rally in stock prices, but I think we're close to an end to those trends. The dollar is likely to resume its decline as we get more evidence that the U.S. economy is slowing and that inflation remains well above Federal Reserve targets. As of April 4, I'm repurchasing shares of Kinross for Jubak's Picks and setting my target price for September 2008 at $25 a share. That's the same target I had when I sold these shares. (Full disclosure: I will buy shares of Kinross Gold for my personal portfolio three days after this column is posted.)
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| Freeport McMoRan Copper & Gold Ord Shs |
FCX |
2/26/08 |
$100.32000 |
$113.13 |
-$1.53 |
12.77% |
On April 23, Freeport McMoRan Copper & Gold's (FCX) blew past Wall Street estimates when it reported first-quarter earnings of $2.64 a share (52 cents above the Wall Street consensus) and revenue of $5.67 billion ($980 million above the consensus). The big stories were rising production of gold, copper and molybdenum, and rising prices. The company realized $3.68 a pound for copper, above last year's average of $3.24; $932 an ounce for gold, above the average of $683 for 2007; and $29.50 a pound for molybdenum, up from $25.70 last year. The company has announced plans to increase copper production by 25% and molybdenum production by 42% by 2010. The big upside and downside question is the company's huge Tenke Fungurume copper mine in the Democratic Republic of Congo. The deposit is especially rich with ore grading: 2% to 5% copper versus 0.5% to 1% at a typical mine. The company believes production will begin in 2009, but the government recently said it had found irregularities in the company's contract. That looks like an effort to negotiate a bigger share of revenue for the government. Unreasonable delays -- a very flexible term when dealing with the government of the Democratic Republic of Congo -- would hurt the share price. As of April 29, I'm raising my target price for shares of Freeport McMoRan Copper & Gold to $132 by December 2008 from the prior target of $122. (Full disclosure: I own shares of Freeport McMoRan Copper & Gold in my personal portfolio.)
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| Exelon Corp |
EXC |
1/15/08 |
$84.61000 |
$84.10 |
+$0.35 |
-0.60% |
You don't have to wait for the world's new generation of nuclear plants to profit from nuclear energy. In fact, given all the real uncertainties that underlie the so-called nuclear revival, I'd bet that going with a company that owns operating nuclear plants that generate electricity now is not only safer but likely to be more profitable in the long haul. Exelon's (EXC) 17 nuclear units generate 18% of all U.S. nuclear power. It costs a coal-fired power plant between $30 and $50 to generate a megawatt-hour of electricity. At a natural gas-fired plant, the cost is $50 to $70. Existing nuclear plants generate electricity for just $15 a megawatt-hour. Nationally, the retail price of electricity averages $100 to $150 a megawatt-hour. Nuclear plants' big edge on profit margins is likely to increase as efforts to combat global climate change impose extra costs on power plants that use carbon-based fuels. Exelon had its best year for power generation from its nuclear units in 2007 thanks to a record 94.5% average capacity. The company seems to think these good times will go on for a while. It has raised the dividend it pays by 14% to an annual $2 a share and announced a $500 million increase to a $1.25 billion plan to buy back shares. (The shares paid a yield of 2.4% as of Jan. 14.) As of Jan. 15, I'm adding these shares to Jubak's Picks with a target price of $92 a share by July 2008.
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| Itron Inc |
ITRI |
12/21/07 |
$93.36000 |
$92.59 |
+$0.49 |
-0.82% |
Momentum is building at Itron (ITRI). On April 30, this maker of 'smart' utility meters and utility-information-management systems reported first-quarter earnings of 82 cents a share, 12 cents above the Wall Street consensus, on revenue of $479 million, $15 million above the analysts' consensus and an increase of 224% from the first quarter of 2007. Growth in the company's new-order backlog shows these big increases aren't going to be a one-quarter thing. The backlog grew to $484 million in the first quarter of 2008, up from $118 million in the first quarter of 2007. And that doesn't include a big contract win at the Southern California Edison subsidiary of Edison International in December 2007, worth about $470 million. That deal itself was a sign that the long logjam in utility orders for next-generation metering systems that fit into the effort to upgrade the electricity transmission grid is breaking up. Still to be awarded are big contracts from Centerpoint Energy and the Detroit Edison subsidiary of DTE Energy. Each of those deals has the potential to cover more metering points than the Southern California Edison contract. As of May 2, I'm raising my target price on Itron to $112 a share by December 2008 from my prior target of $108. (Full disclosure: I own shares of Itron in my personal portfolio.)
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| ENBRIDGE INC |
ENB |
12/18/07 |
$38.32000 |
$43.49 |
-$0.26 |
13.49% |
When I added Enbridge (ENB) to Jubak's Picks on Dec. 18, I advised you to buy these shares of the parent oil- and gas-pipeline company if you wanted growth and to buy Enbridge Energy Partners, a master limited partnership, if you wanted income. (On that date I added the latter to my Dividend Stocks for Income Investors portfolio.) At the time, the master limited partnership yielded 7.6%, and Enbridge shares yielded 3.2%. So what happened when the company announced fourth-quarter 2007 earnings on Feb. 6? Enbridge beat Wall Street's earnings-per-share consensus estimate by two pennies (a 32% increase in earnings per share from the fourth quarter of 2006) and raised its quarterly dividend by 7.3%, to 33 cents from 30.75 cents a share. Shares of Enbridge now yield 3.28%. As good as the short-term results are, however, the reason to own shares of Enbridge is its long-term pipeline. Enbridge has an impressive number of pipeline projects set to start pumping up revenue in the next two to three years. The Alberta Clipper Expansion is projected to deliver as many as 800,000 barrels a day of heavy crude from Alberta's oil sands to Wisconsin by mid-2010. The Southern Access Expansion will deliver 400,000 barrels a day of heavy crude to Chicago and southern Illinois from Wisconsin in 2009. The Clarity pipeline will transport natural gas from the Barnett Shale and Anadarko Basin in Texas. As of Feb. 22, I'm increasing my target price for shares of Enbridge to $46 a share by December 2008 from my prior target of $44.50 by November 2008.
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| Fortescue Metals Group Ltd |
FSUMF |
12/19/07 |
$5.25000 |
$8.90 |
unch |
69.52% |
I added Fortescue Metals Group (FSUMF) to Jubak's Picks with an eye on the annual price negotiations between Chinese steel companies and the three big iron-ore producers that control 75% of the global iron-ore trade. I was looking for the negotiations to produce an increase of 50% or so on top of already high iron-ore prices for 2008. Well, the talks are over, and it looks like the price of ore will jump by 60% to 70% in 2008. That's good news for Fortescue, the largest of the smaller companies exploiting newly discovered iron-ore deposits in Western Australia. The company is set to deliver its first ore in May, and, as of a January report, construction of a mine, rail line and port are on schedule. As of Feb. 22, I'm raising my target price for Fortescue to $9.25 a share by September 2008 from my prior target of $8.50 by July 2008. (Full disclosure: I own shares of Fortescue in my personal portfolio.)
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| Plum Creek Timber Co Inc |
PCL |
11/16/07 |
$43.22000 |
$42.98 |
+$0.01 |
-0.56% |
They're not making any more land, and someday soon I expect overseas investors to figure out that a long-lived asset such as land is exactly what their portfolios need. At a recent share price of $44.46, an investor in Plum Creek Timber (PCL) was buying the company's 1.2 million acres of higher- and better-use land -- acreage that will one day host houses and commercial buildings -- plus 7 million acres of other timberland. Timber operations and wood-products manufacturing accounted for 80% of the company's $1.63 billion revenue in 2006. Plum Creek, which is organized as a real-estate investment trust, paid a dividend of 3.9% as of Nov. 13. As of Nov. 16, I'm adding these shares of Jubak's Picks with a target price of $49 a share by October 2008.
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| Rayonier Inc |
RYN |
11/9/07 |
$46.02000 |
$44.36 |
unch |
-3.61% |
On April 22 Rayonier (RYN) beat the Wall Street consensus by 6 cents a share. Revenue, however, fell 5.2% from the first quarter of 2007 and missed Wall Street estimates by about $4 million. The upside earnings surprise came from better-than-expected prices on sales of real estate. The revenue shortfall was a result of the continued slump in timber prices. For the second quarter and for all of 2008, the company told Wall Street to expect earnings below those in the comparable periods of 2007. A day after the earnings report, Rayonier announced it would begin a 6,300-acre development in Flagler County, Fla., in partnership with Atlanta developer Cousins Properties. I don't think this is a sign of a bottom in the real-estate market but rather an effort by Rayonier to be ready -- in one of the fastest-growing counties in the United States -- for the turn when it comes. Rayonier owns 14,516 acres in Flagler County. As of April 29, I'm going to leave my target price for Rayonier at $55 a share by November 2008. The shares currently pay a dividend of 4.7%. (Full disclosure: I own shares of Rayonier in my personal portfolio.)
|
| Joy Global Inc |
JOYG |
10/30/07 |
$56.71000 |
$79.09 |
-$0.87 |
39.46% |
On March 6, mining-equipment maker Joy Global (JOYG) reported first-quarter earnings of 64 cents a share, a penny below Wall Street expectations, and revenue of $640.3 million, a tad above consensus forecasts of $639.3 million. Revenue climbed 14.2% from the first quarter of 2007. The company's good news for 2008 easily outweighed that slight disappointment. For fiscal 2008, the company expects earnings per share of $3.15 to $3.45, higher than the current Wall Street consensus of $3.35, and full-year revenue of $3.1 billion to $3.3 billion versus the $3 billion consensus forecast. Joy Global noted that coal supply is not keeping up with demand and reported that more coal-fired power plants are under construction in the United States than at any time in the past 25 years. I think the company will continue to reap the rewards of surviving the 15-year downturn in the mining industry that wiped out much of its competition. Joy Global recently told Wall Street that its goal is to produce 20% annual compound earnings growth through 2012, and I don't see anything to suggest it won't. As of March 10, I'm raising my target price for Joy Global to $77 a share by September 2008. (Full disclosure: I own shares of Joy Global in my personal portfolio.)
|
| Gilead Sciences Inc |
GILD |
9/25/07 |
$40.72000 |
$54.02 |
-$0.46 |
32.66% |
On April 16, Gilead Sciences (GILD) reported first-quarter earnings of 51 cents a share, well above the Wall Street consensus of 47 cents. Total revenue of $1.26 billion rose 22% from the first quarter of 2007 and came in above the consensus projection of $1.22 billion. The big driver was the company's HIV drug franchise, which produced revenue of $965 million, about $50 million above consensus. The company also raised its 2008 estimates for U.S. sales of its HIV drugs. On Sept. 25, 2007, I added Gilead to my long-term 50 Best Stocks in the World portfolio and to my shorter-term Jubak's Picks as well. As of April 18, I'm raising my target price to $61 share by April 2009 from my prior target of $48 by September 2008. (Full disclosure: I own shares of Gilead in my personal portfolio.)
|
| Ultra Petroleum Corp |
UPL |
9/21/07 |
$57.87000 |
$85.18 |
-$0.42 |
47.19% |
On Feb. 20, Ultra Petroleum (UPL) announced fourth-quarter earnings that were 2 cents a share short of average analyst estimates. Revenue rose almost 8% from the fourth quarter of 2006 to $162 million, beating the analyst consensus of $156 million. More important than any of this, however, the company said it would raise production 18% to 21% in 2008 and then by 25% to 30% more in 2009. I had added this stock to Jubak's Picks on Sept. 21, 2007, because the new Rocky Mountain Express natural-gas pipeline would enable gas producers in the Rocky Mountain region, the fastest-growing source of natural gas in the U.S., to finally get their product out of their relatively small local market and into the bigger markets of the eastern U.S. That would gradually wipe out a discount that in 2007 saw natural gas selling for $3.37 per million cubic feet less in Wyoming than in Louisiana. Well, the Western stage of that pipeline, Rex-West, started delivery of natural gas to Kansas on Jan. 12. A second stage, expected to start partial service in December and full service in June 2009, will deliver gas to Ohio. As of Feb. 26, I'm raising my target price for Ultra Petroleum to $88 a share from a prior $85 by October 2008. Please note: If you're following along at home with my fair-value calculations for Ultra Petroleum and four other natural-gas stocks, you should raise that fair-value price for the stock to $92 a share. (Full disclosure: I own shares of Ultra Petroleum in my personal portfolio.)
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| Thompson Creek Metals Ord Shs |
TC |
06/26/07 |
$15.950 |
$22.20 |
-$0.61 |
39.19% |
The fundamentals in the molybdenum market are looking better and better for 2008. It now looks like the metal will record a supply deficit of 10 million pounds in 2007 and 17 million pounds in 2008. New supply isn't likely to come into production until 2010. Molybdenum prices would average $30 a pound in those two years, according to Desjardins Securities. All good news for Thompson Creek Metals (TC) the second-largest publicly traded producer of molybdenum in the world. It costs the company about $6 a pound to produce molybdenum from its mines, and the company plans to increase production by designing a mill, increasing activity at its existing mines and opening its new Davidson project to mining in late 2008. All these steps would increase production to 29 million pounds in 2009 from a projected 21 million pounds in 2007. You do the math on earnings growth. As of Oct. 22, I'm raising my target price for Thompson Creek Metals to $30 a share by October 2008 from the prior target of $25 by December 2007. (Full disclosure: I own shares of Thompson Creek Metals in my personal portfolio.)
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| Yara International Each Repr 1 ADR |
YARIY |
05/22/07 |
$29.50000 |
$80.00 |
unch |
171.19% |
On April 16, Potash of Saskatchewan announced that Canpotex, a Saskatchewan potash-export cartel, had finished its negotiations with Sinofert, the largest fertilizer distributor in China. The result: a 230% price increase over last year and a 10% increase from the price India had just negotiated. Add this to news that China is planning to slap a 100% tax on its urea fertilizer exports, which should add $100 a ton to the global price of urea, and there's good reason to believe fertilizer prices can keep climbing even from current highs. As of April 18, I'm raising my target price for Yara International (YARIY) to $78 by June from my prior target of $54.60 by March 2008. (Full disclosure: I own shares of Yara in my personal portfolio.)
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| Maxwell Technologies Inc |
MXWL |
01/23/07 |
$12.55000 |
$11.86 |
+$0.09 |
-5.50% |
Maxwell Technologies (MXWL) inched a little closer to rewarding patient investors in the first quarter of 2008. On May 6, the company reported earnings of $17.3 million for the first quarter. That's an increase of 38% from the first quarter of 2007. The company still reported an operating loss for the period, but it shrank to $3.4 million from $4.5 million in the first quarter of 2007. Gross margins climbed to 30% from 29% in the fourth quarter of 2007 as the company improved manufacturing efficiency. The company's cash, a critical resource for a company that's still generating losses, fell to $28.6 million in the quarter compared with $30.2 million in the fourth quarter of 2007. But the most important -- and most favorable -- news came from the company's ultracapacitor business, where revenue climbed by 64% to $5.4 million from the first quarter of 2007. The potential for devices that can quickly store and then discharge energy in electric and hybrid cars, in wind power and in the utility grid is, after all, the reason that I added this stock to Jubak's Picks on Jan. 23, 2007. The company also announced May 6 that it would open a customer support office in Germany for European automakers and suppliers using its ultracapacitor technology. The company also reported that a big deal it had announced in the fourth quarter of 2007 -- to supply ultracapacitors to Continental, a German auto supplier, for use in a hybrid that BMW is expected to launch in the 2010 model year -- remains on schedule. As of May 9, I'm keeping my target price at $14 a share by December 2008. (Full disclosure: I own shares of Maxwell in my personal portfolio.)
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| SiRF Technology Hldgs Inc |
SIRF |
01/12/07 |
$28.13000 |
$7.12 |
-$0.04 |
-74.69% |
It wasn't a good quarter. On April 25, SiRF Technology Holdings (SIRF) reported first-quarter revenue of $62 million, down 8% from the first quarter of 2007. A loss of 14 cents a share was twice as bad as Wall Street had expected. The lousy numbers weren't just a reflection of slowing sales and falling prices in the GPS market after the holiday selling season, although weak demand in that market certainly didn't help. The bigger problems are evidence that SiRF Technology is losing market share to competitors with cheaper products and that the company needs a top-to-bottom restructuring so that it can compete on cost. Unit volume climbed 34% year to year, but unit volume in the market grew by 78%, showing pretty clearly that the company is losing market share. Management has launched what seems to be a top-to-bottom review of its strategic options, which range from cutting costs to potential mergers and acquisitions. I continue to believe that we've taken the bulk of our damage in these shares. The stock dropped 14% on the bad news but then regained most of the lost ground. I think it's worth holding on for either a second-half turnaround in sales with a pickup in end markets or a potential takeout by a competitor or in a private-equity buyout. As of May 6, I'm keeping SiRF Technology in Jubak's Picks at my prior target price of $12 a share by January 2009. (Full disclosure: I own shares of SiRF Technology in my personal portfolio.)
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| Deere & Co |
DE |
01/12/07 |
$49.66500 |
$90.26 |
+$0.89 |
81.74% |
There are no signs that Deere (DE) or the farm belt are slowing down at all. On Feb. 13, before the markets opened, Deere reported first-quarter earnings (the company's first quarter ended Jan. 31) of 83 cents a share, 5 cents a share above the Wall Street consensus estimate. Revenue climbed 17.5% to $5.2 billion, about $170 million above Wall Street projections. The company projected sales growth of about 17% for all of fiscal 2008 and growth of 23% in the second quarter. The fastest growth will come in agricultural equipment, where the company expects sales to climb 28% in fiscal 2008. Commercial- and consumer-equipment revenue is projected to grow 8%, down from the company's previous forecast of 10% for 2008, and sales of construction equipment is likely to be flat for 2008, just as the company said in its most recent guidance to investors. As of Feb. 14, I'm raising my target price for Deere to $101 a share by December 2008, up from $90 a share by June 2008.
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| Tejon Ranch Corp |
TRC |
12/12/06 |
$54.43000 |
$42.55 |
unch |
-21.83% |
On May 8, Tejon Ranch (TRC) and a coalition of environmental groups announced an agreement that would conserve 240,000 acres of the company's 270,000 acre Tejon Ranch but permit development to go ahead on the remaining 30,000 acres. That agreement will let the company move ahead with its plans to build three residential centers with 26,000 houses plus hotels, condominiums and golf courses at the southern and western edges of the ranch, which lies just 60 miles north of Los Angeles along Interstate 5. The deal puts sets aside more land in conservation easements and public parks than I'd expected, but the trade-off seems worth it because environmental groups had the ability to delay this project for years. At the stock's closing price May 8 ($42.28 a share), investors are getting an acre of developable land for about $23,800 when they buy shares in the company. Not as good a price as the $14,000 an acre I figured back in November when the stock was lower and I thought the company would hold on to more land, but still a steal for real estate within commuting distance from Los Angeles. It's no secret that it will be a while before Tejon Ranch gets these communities bought and sold -- there's a real-estate depression in California. But I think this one will pay off in the long run, and the company took a big step toward bringing the long run closer this month. As of May 9, I'm keeping my target price at $52 a share by October 2008. (Full disclosure: I own shares of Tejon Ranch in my personal portfolio.)
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| Devon Energy Ord Shs |
DVN |
7/18/06 |
$59.53000 |
$116.89 |
+$0.61 |
96.35% |
Unlike a lot of oil companies I could name, Devon Energy (DVN) is having no trouble increasing production. On May 7, the company announced that first-quarter production of oil and natural gas climbed 9%. That marks the eighth consecutive quarter of production increases for Devon Energy. The earnings story, however, didn't match up to the production increase. The company reported a loss of $750 million on derivatives used to hedge oil production. Counting that loss, earnings per share were $1.68, a 15% increase from earnings in the first quarter of 2007. Excluding special items like this, earnings were $2.74 a share, a big 21% above Wall Street estimates. In the quarter, Devon saw record production of 995 million cubic feet of natural gas per day from its Barnett Shale oil holdings. That was a 36% increase from production in the first quarter of 2007. In Canada, the company saw its first production from its Jackfish oil sands project in Alberta. Production is forecast to peak at 35,000 barrels per day in early 2009. In the Gulf of Mexico, Devon continued appraisal drilling on its four big deep-water discoveries of 2008. Drilling of the first production wells is projected for later in 2008. As of May 9, I'm raising my target price on Devon Energy to $130 by December 2008 from my prior target of $108. (Full disclosure: I own shares of Devon Energy in my personal portfolio.)
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| GOLDCORP INC |
GG |
5/30/06 |
$30.55000 |
$38.35 |
-$1.09 |
25.53% |
On May 5, GoldCorp's (GG) announced first-quarter earnings of 23 cents a share, 2 cents a share above Wall Street expectations. Revenue climbed 32% from the first quarter of 2007 but, at $627 million, still came in below analyst projections by $46 million. Cash costs in the company's gold operations -- that's costs net of sales of copper and silver -- for the quarter climbed to $240 per ounce from $181 an ounce in the same quarter of 2007. That still leaves Goldcorp with one of the lowest cost structures in the gold industry. The company also announced that its big Penasquito mine in Mexico remains on schedule for the first gold pour from ore in 2008. The company recently upgraded proven and probable reserves for the mine to 13 million ounces of gold and 864 million ounces of silver. As of today, May 6, I'm raising my target price for Goldcorp to $46 a share by December 2008 from my prior target of $41 by October 2008. (Full disclosure: I own shares of Goldcorp in my personal account.)
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|
| Company |
Symbol |
Date
Dropped |
Price
Then |
Price
Now |
% Change
Since Dropped |
| Jacobs Engineering Group Inc |
JEC |
3/18/08 |
$73.49000 |
$90.51 |
23.16% |
The financial markets and the economy continue to deteriorate, and shares of Jacobs Engineering (JEC) have dropped below technical supports. I'm simply not willing to hold them with their downward momentum in the current market, so I'm selling them out of Jubak's Picks with my March 18 column. I think I'll have a chance to repurchase these shares at a lower price later in the year. A relatively minor part of the company's business has big exposure to a slowing U.S. economy. Government spending on such projects as water and wastewater systems will slow because of budget gaps created by falling tax revenues. This segment accounts for just 8% of Jacobs' revenue, but with the company facing tough year-to-year growth comparisons, I think a shortfall in this segment will be enough to send the stock's price down from even current levels. As of March 18, I'm selling these shares with a 22% loss since I added them to Jubak's Picks on Oct. 30. This sell moves my cash position in Jubak's Picks to 47% of the portfolio. (Full disclosure: I will sell Jacobs out of my personal portfolio three days after this column is posted.)
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| Dynamic Materials Corp |
BOOM |
3/4/08 |
$53.31000 |
$37.35 |
-29.94% |
This is a market call. As of March 4, I'm selling Dynamic Materials (BOOM) out of Jubak's Picks because the shares climbed 30.4% in the rally from Jan. 17 to Feb. 29 and because I think that rally is about to fail. The market, in my opinion, is likely to fail its testing of February's lows and then head about 10% lower to test the summer 2006 lows around 2,000 for the Nasdaq Composite Index and around 1,220 for the S&P 500. I'm selling these shares out of Jubak's Picks with a 12% loss since I added them to the portfolio on Dec. 7, 2007.
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| Weatherford International Ltd |
WFT |
3/4/08 |
$67.93000 |
$83.91 |
23.52% |
This sell of Weatherford International (WFT) is also a market call, on what I think is a developing bubble in oil prices. An influx of hot money looking for some alternative to stocks, bonds and mortgage-backed securities has driven commodity prices up at historic rates. The Reuters/Jefferies spot commodities index was up 15.3% in January and February. That's the biggest increase in the index since it was started in 1956. I think oil is due for a pullback when the Organization of Petroleum Exporting Countries decides (my prediction) at its March meeting that the political cost of cutting production when oil is over $100 a barrel is just too high and when rising production in non-OPEC countries meets up with falling demand from a global economic slowdown. The resulting correction will wring some of the speculative excess of out oil prices and certainly won't mark an end to the long-term rise in oil, but I'd like to cut my exposure to oil before the correction so I can buy at lower prices. As of March 4, I'm selling Weatherford out of Jubak's Picks with a gain of 6% since I added it to the portfolio on Jan. 8, 2008.
|
| Kinross Gold Ord Shs |
KGC |
3/4/08 |
$24.96000 |
$19.25 |
-22.88% |
I think gold is headed to $1,000 an ounce in the short term, but that's now just $15 a ounce away. And though I think the inflationary winds will eventually blow gold well above $1,000 an ounce, I think the price is likely to face some heavy resistance around that $1,000 level. The most recent news out of Kinross Gold (KGC) urges me to caution. In the fourth quarter of 2007, the company reported lower production at its Round Mountain gold mine and higher-than-expected costs. Cash costs for 2008 now look to be around $370 an ounce. Contrast that to cash costs of $195 for Goldcorp(GG). I'm probably leaving money on the table here, but with Kinross' costs higher than expected and production lower, there's no way I can get to a target price above $25 a share. With the stock at $25.87 as I write this March 3, I'm planning to sell Kinross out of Jubak's Picks on March 4 with a 117% gain since I added it Sept. 22, 2006. (Full disclosure: I will sell shares of Kinross out of my personal account three days after this column is posted.)
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| Lan Airlines ADR Rep 1 Ord Shs |
LFL |
2/26/08 |
$14.18000 |
$11.70 |
-17.49% |
If growth in Chile and neighboring countries is about to slow because of energy shortages, I don't especially want to hold shares of Chile's Lan Airlines B (LFL) in the economically sensitive airline industry. I'm going to take advantage of the rally that took the stock to $14.62 on Feb. 26 from $11.08 on Jan. 26 -- a gain of 32% -- to sell this stock out of Jubak's Picks. I continue to like Lan Airlines for the long haul as a play on the developing economies of South America, but I don't care for short-term risk from the regional economy. I'm selling these shares as of Feb. 26 with an 11% loss since I added them to Jubak's Picks on May 8, 2007. (Full disclosure: I will sell my personal position in Lan Airlines three days after this column is posted.)
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| Brown Forman Class B Ord Shs |
BF.B |
2/12/08 |
$66.28000 |
$72.43 |
9.28% |
I'm going to take advantage of the current rally in this bear market to sell Brown Forman B (BF.B) and raise more cash. I bought this stock thinking I'd get protection in a market correction, but I haven't found much shelter here. I'm selling these shares with an 8% loss since I added them to Jubak's Picks on Dec. 14, 2007.
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| Quintana Maritime Ltd |
QMAR |
2/1/08 |
$23.16000 |
$24.29 |
4.88% |
On Jan. 29, Quintana Maritime (QMAR) received a cash-and-stock bid from Excel Maritime Carriers. The bid -- $13 and 0.4 share of Excel stock for each share of Quintana -- was worth $26.68 a share with Excel trading at $33.51 at noon Jan. 30. I think Excel would get quite a bargain here because the net asset value of Quintana -- dry-bulk carriers are traditionally valued on the net asset value of their ships -- is about $37.66 a share, according to Cantor Fitzgerald. The deal is likely to go through because Quintana has been courting a buyer for months, and this deal has been in the works for almost that long. The bargain is a result of what I think is a temporary drop in dry-bulk shipping rates that has already started to reverse. The Baltic Dry Index, which tracks the cost of moving raw materials such as grain or iron ore by sea, had fallen almost 50% in the past three months before reversing Jan. 29. The index climbed that day by 285 points, its largest gain in two years. The fall in the index had come on worries over a slowing global economy -- less growth means less stuff to ship. The sell-off on those fears went to an extreme, and I don't think we're seeing a bounce back. The sector is due for a bout of extreme volatility until investors have a better feel for the direction of the world economy. I'm going to sell Quintana out of Jubak's Picks on the news of this deal. If you want to stay in the sector I'd suggest shares of Genco Shipping & Trading or DryShips. Both of those stocks are better bets than Excel. I'm selling with a 17.6% loss since I added Quintana to Jubak's Picks on Oct. 16.
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| DuPont Ord Shs |
DD |
1/29/08 |
$45.15000 |
$49.53 |
9.70% |
I'm going to take advantage of this bounce, rally, whatever to sell my position in Dupont (DD). I think we're headed toward a bear market, and I'd like to use opportunities like this one to move the portfolio further to cash. I'm also looking ahead to the day when I think it's time to buy again, and, when I do, I'd rather own Monsanto, the leader in this segment, than DuPont. Today's sale gives me the cash for that future buy. I'm selling these shares with a 6.5% loss since I added them to Jubak's Picks on Nov. 2. This sale, along with the same-day sale of CGG Veritas below, moves the Jubak's Picks portfolio to 34.7% cash.
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| CGG Veritas ADR |
CGV |
1/29/08 |
$48.42000 |
$53.47 |
10.43% |
As with the sale above, I'm looking ahead to when it's time to buy again. At that point, I'd rather own the segment's leader, Schlumberger, rather than (CGV). Today's sale gives me the cash for that purchase. I'm selling these shares with a 27.3% loss since I added them to Jubak's Picks on Oct. 26.
|
| Pentair Inc |
PNR |
1/22/08 |
$27.80000 |
$37.01 |
33.13% |
I like Pentair's (PNR) progress on raising operating margins in its water business. I like the water sector, and I certainly like the company's increasing penetration of Asian markets. But that's all outweighed by the recent lengthening of the U.S. housing downturn -- recent numbers show the bottom is even further off -- and the imminent outbreak of a bear market. I guess you'd say, in Wall Street parlance, that these shares aren't timely. As of Jan. 22, I'm selling Pentair out of Jubak's Picks with a 23% loss since I added them Nov. 2, 2007. This sale raises the cash position in Jubak's Picks to about 31%.
|
| Nokia ADR |
NOK |
1/18/08 |
$32.60000 |
$28.31 |
-13.16% |
Holding on to Nokia (NOK)in a market that seems determined to punish technology growth stocks -- and that is deeply afraid of slowing growth in the United States, Europe and Asia -- just doesn't make good sense right now. In the long term, I like Nokia's ability to build market share in developing economies by selling inexpensive phones while still making a profit, but I don't think the stock market is in a mood now to reward long-term fundamental competitive advantage. As of Jan. 16, I had a loss of 13% on these shares since I added them to Jubak's Picks on Oct. 30, 2007.
|
| Anglo American ADR |
AAUK |
1/18/08 |
$25.53000 |
$32.77 |
28.36% |
I think we're seeing the beginnings of a very modest slowdown in economic growth in China and Asia that's enough to take the luster off the materials sector and Anglo American (AAUK) for a bit. I think this is likely to be no more than a six-month rest for these stocks as they catch their breaths and investors work through their fears that a U.S. economic slowdown will bring a big drop in global commodity demand. I'd look to buy these shares again in mid-2008. In recent days the trend in Anglo American shares has turned down, and I'm going to sell to protect my profits in this position. As of Jan. 16, I had a 35% gain in these shares since I added the stock to Jubak's Picks on Jan. 13, 2006. (Full disclosure: I will sell my personal position in Anglo American three days after this column is posted.)
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| Corning Inc |
GLW |
1/18/08 |
$22.20000 |
$26.16 |
17.84% |
I think the stock market has moved into a downturn that will take another bite out of everything but the most defensive picks. I like Corning's (GLW) long-term prospects as a leader in glass for flat-panel TVs, in optical fiber and increasingly in diesel-filter systems, but I don't think the stock can buck the trend in the technology sector or in the market as a whole. Its chart shows the 50-day moving average breaking below the 200-day moving average, and that's never a good sign. I'd certainly repurchase this one when the downturn is over, but I think the odds of a further retreat in the market are high enough that I'm not willing to see all my profit in this position evaporate. As of Jan. 16, I had a 17% gain in Corning shares since I added the stock to Jubak's Picks on July 28, 2006. (Full disclosure: I will sell my personal position in Corning three days after this column is posted.)
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| Companhia Vale Do Rio Docea Rep 1 Ord Shs ADR |
RIO |
1/15/08 |
$31.05000 |
$40.64 |
30.89% |
The problem isn't that 2008 will be so bad for Companhia Vale do Rio Doce (RIO) but that 2007 was too good. Revenue climbed a huge 65% last year, and the increase looks a lot more modest in 2008, with Standard & Poor's putting revenue growth at 14%. The stock's price-earnings ratio doesn't seem high at 14.4 times trailing earnings, but that's way above the eight-to-nine multiple it showed from 2003 through 2006. The huge load of debt the company has taken on to buy nickel supplier Inco and increase capital spending rapidly also makes this stock riskier in the current market. The company's long-term debt climbed to $17.5 billion in the third quarter of 2007 from $4.6 billion in the third quarter of 2006. So I'm going to take my profits in the company, now known as Vale. I have a 56% gain since I added the stock to Jubak's Picks on April 17, 2007. (Full disclosure: I will sell my personal position in the stock three days after this column is posted.)
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