I am going to continue the review of stocks that I had initially selected as candidates for the portfolio, but discarded for various reasons.
But first, a few words on the long term plan for this blog. I’ve already made one post on each of the 8 stocks in the portfolio. These posts provide the general consensus negative view on the stocks and my counterpoints and reasons for buying the stocks. This has been followed by the current series of posts on the 20 stocks left behind and my reasons for not buying the stocks.
Once this has been wrapped up, I will move into tracking news and developments for each stock in the 8 Stock Portfolio, along with the implications and my interpretations. At the end of each week, I will post a performance review detailing how each stock and the portfolio as a whole has performed. Any other features you would like to see? Leave a comment.
Back to the 20 stocks left behind…
American Axle & Manufacturing Holdings (AXL)
American Axel is in the auto parts business. This includes many products and components that fit into a car somewhere, but I am not sure where. The American auto industry currently has some problems, and this company’s fate will be inextricably linked. AXL actually derives a whopping 80% of their revenue from GM. That’s too much dependence on a single customer who is losing billions of dollars each quarter.
52 Week High Price: 28.11
Recent Price: 5.77
Decline from 52 Week High: 79%
AmeriCredit (ACF)
AmeriCredit is an auto finance company. They specialize in lending to customers who have limited access to automobile financing, which makes them a “subprime auto finance company.” There seem to be a number of supposedly savvy investors buying shares in the company, like Leucadia (LUK) the “mini-Berkshire,” but I can’t get behind them on this one. How can subprime auto lending hold up better then subprime mortgage lending? While the stock is down 58%, I feel like it should be lower.
52 Week High Price: 21.28
Recent Price: 9.00
Decline from 52 Week High: 58%
Dillard’s (DDS)
Dillard’s operates department stores in the southeast, southwest, and midwest. Being from the northeast, I’ve never been to one of their stores, which I usually like to do before investing. Another reason for eliminating this stock was because I preferred specialty retail to broader category department stores. If and when retail does rebound, specialty retail stocks should have bigger moves. And finally, this company has a stock symbol that reminds me of the dentist. Yikes.
52 Week High Price: 29.12
Recent Price: 10.16
Decline from 52 Week High: 65%
Standard Pacific (SPF)
Standard Pacific is a builder of single family and detached homes. As previously mentioned previously, I made the general decision not to select any housing or financial stocks. If Carl Ichan can’t pick out the survivors (hear about WCI Communitities?), I’m not even going to try. SPF also just wrapped up an extremely dilutive equity sale. That might help them survive, but at what cost?
52 Week High Price: 14.23
Recent Price: 3.22
Decline from 52 Week High: 77%
ETrade Financial (ETFC)
Etrade, the once brokerage firm that decided to expand into everything financial. To see how this strategy has paid off, copmare ETFC to AMTD. Etrade’s wounds are self inflicted and I don’t want to be along for the ride as they attempt to pick up the pieces.
52 Week High Price: 17.85
Recent Price: 3.05
Decline from 52 Week High: 83%
Carmike Cinemas (CKEC)
Carmike operates movie theaters in the United States. They also sport a hefty dividend, as long as they keep paying it. I decided that the movie theater industry is not something I want to invest in. Entertainment has changed radically in just the past decade, but movie theaters haven’t changed for like a century. I think either the industry will have a slow dripping demise, or something better will come along and blow them out of the water.
52 Week High Price: 20.00
Recent Price: 6.55
Decline from 52 Week High: 67%
Come back tomorrow the final six of the 20 Left Behind!
No Comments Yet
You can be the first to comment!
Leave a comment