After selling off my oil and gas investments, I had a lot of cash lying around, and I realized that TD Ameritrade was paying me a really lousy interest rate. I thought about putting all of it into a short term bond ETF, but then it occurred to me that a great investor like me can surely do better than that. So here are some of the stocks I purchased:
Tyco Electronics Ltd. (TEL) - Tyco Electronics just split off from Tyco International. This purchase is based solely on the fact that the electronics part of Tyco has a low P/E ratio. Management is predicting a low growth rate. A basic value stock. This is a rare case where I invested in a large cap company.
Empire Resources Inc. (ERS) - A tiny company (99.86 million market cap at this moment) that resells semi-finished aluminum. Why don't the buyers just skip this middleman and go directly to the aluminum mills? I don't know, but Empire Resources seems to have a history of steady income and a low P/E ratio. It's one of those value stocks that big funds with billions of assets can't invest in.
Pogo Producing Co. (PPP) - Wait, didn't I swear off oil and natural gas stocks? Well, I suppose it was a mistake to want to be completely out of this sector. PPP has a low P/E ratio compared to its peers and recently completed a favorable sale of some of its non-core assets.
Spherion Corp. (SFN) - A temporary and permanent staffing company with a market cap of $525 million. It seems to be a poorly run company, but it's really cheap from a balance sheet perspective, and it's not losing money - in fact it had eight consecutive profitable quarters - so it seems like a good opportunity to buy and hope that management improves or the company is purchased by someone else.
I will post even more stock picks later this week.
Diversify. The USA is growing at 2% while Poland for example is growing at 7%. I bought a China through Hang Seng is 50% up this half year alone.
Posted by: j | July 09, 2007 at 02:30 PM
ERS , High debt to equity ratio (3.9 by Yahoo), negative free cash flow since 2003 (reuters report), low margins. Yet, they do seem to be growing revenues decently.
SFN may suffer if the economy slows significantly, affecting hiring.
Posted by: GOP Lurker | July 09, 2007 at 05:12 PM
ERS has an interest coverage ratio of 2.5, using last year's income and the current quarter's interest expense multiplied by four. And ERS has many consecutive years of growing revenue and income. So the debt load doesn't seem to be a problem.
Yes, SFN is subject to the risk of a hiring slowdown. An acceptable risk as part of a diversified portfolio, and the company is in no danger of going under given its huge stockpile of cash.
Posted by: Big Mike | July 09, 2007 at 06:34 PM
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Posted by: Penny Stocks | June 06, 2009 at 07:42 AM