Sunday, June 25, 2006

Ninja Stock Picks

In case you're wondering, I'm not done with my spinoff Ninja stock picking blog. But I wanted to give you guys an update.

First: An update on an honorary stock-picking Ninja: Warren Buffett.

CNN is reporting that Buffett, the world's second richest man is giving away his fortune. Most of it is going to: The Bill and Melinda Gates Foundation. Bill Gates? I'm sorry, but the Home Improvement Ninja beer fund could use those funds more than Bill Gates could.

I had hoped to develop my blog into some sort of profit making enterprise and sell it to Buffett for a few million, but I'm not above taking a few billion dollars of his charity. In case you're wondering, here's how my secret plan was going to work:

Phase 1: Set up Home Improvement Ninja Blog.
Phase 2: ???
Phase 3: Profit.

It's genius, I tell you.

ANyway, here's an update on the ninja stock picks. I'll announce the spinoff blog when I get it finished.

Embarq (EQ). EQ is a rural ILEC. I predicted a price of $60-70 on this based on the P/E ratios of other Rural ILECs. I thought it would take about a year to get there. I bought it $39.92, it's currently $39.75. So still not going up yet. Bear Stearns, however, started following the stock and rated it an "outperform" and gave a price estimate of $46. Most other analysts were estimating a one year price to $49. I re-checked my numbers and the reason why my estimates were higher is that I assumed earnings would stay the same (a rookie mistake). Still, the stock trades at 1.20 times book value, so I doubt it will lose value. The other analysts were assuming that earnings would decline, but even with those less favorable assumptions, a price of $46-49 over a year still works out to a 12-20% annualized return. Mad skillz!!!

American Home Mortgage (AHM). I bought in at $32.10 i think. It's now at $34.90 evem though the market sucks lately. That's up about 8% in the few weeks since I recommended it. (and the dividend is almost 12%) Holla! Still, I think It's a holder, not a short-term thing. The price should drop a dollar in a few weeks after they pay the $0.96 dividend, so do your own research and decide if it's still worth having.

Smith and Wesson (SWB). I didn't mention this in my blog because I hadn't finished with my research before I bought it (something you should never do). But what I saw looked good and the price was going up before the analysts conference call (which I listened to) so I bought assuming that the news would be good. I also got to call into CNBC's Mad Money and ask Jim Cramer about this stock. He said it's a buy. I got in at $7.55, now it's $8.20. Cramer says it looks good because congress passed a law that exempts them from lawsuits by cities suing over criminals using handguns. I think it's a good buy because they have a good shot at a couple of big military contracts. One is currently with Berretta, which is a foreign company and it expires in 2007. The other is a contract for the Iraqi police. Smith and Wesson beat out Berretta for the military contract to supply the Afgan police so it has a good shot of winnng the Iraqi contract too since it's competing against the same people. It's up 9% since I bought it, but I plan on holding it for a while until I get news on the contracts.

Also, next week I'll try to recommend one homebuilder stock. I knew that wall street types were overrated, but seeing as how awesome I am at this even though I just started, am doing it in my spare time (when I'm not fixing my house, drinking myself into a stupor, or watching netfilx) and it's my first time trying it, I should do this for a living. Maybe after I get rich from this I'll find a cure for cancer or figure out time travel.


I also got my compy fixed so I may have some actual home improvement pics again this week.

4 comments:

Anonymous said...

I would just like to say "thank you". My friend (who seems to be a bit of a blog stalker) turned me onto your post. Your blog has been added to my favorites. I don't usually do this on first date but I thought I would just "slut out" for you. I even sent the link to my brother. He is a big shot NYC over-educated hedge fund guru but will dig your stock picks and humor. Although you might lose both of us on your political views. You are going global man!

Gui said...

"Time to go to work! Work all night!
Search for underpants hey!
We won't stop until we have underpants!
Yum tum yummy tum hey!"

-- South Park "Gnomes"

I love that episode!!!!

Momentary Academic said...

More home improvement pics! (I'm trying to figure out if you live on my street.)

HomeImprovementNinja said...

thanks anon. One can never have too many blog sluts.

gui: I'd quit my job to work for South Park. If I was in Hollywood, I'd be one step closer to hooking up with Judy Greer or Nicole Eggert.

momentary: I don't usually post pics of the outside of the ninja fortress. But if you drive by, mine is the place with the mad chi emanating from it.