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.