A portfolio of 8 stock picks from the edge

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 … read on »

As I mentioned in an earlier post, I had selected the 8 Stock Portfolio from a short list of almost 30 candidate stocks. I thought it would be interesting to post the stocks that I removed from consideration and the various reasons why I thought these stocks didn't measure up. This will probably be an interesting list to revisit at some point in the future. If it turns out that my removals have outperformed the 8 … read on »

Whole Foods Market (WFMI) is an upscale natural and organic supermarket operator also jokingly referred to as "Whole Paycheck Market" and the home of $6 per gallon milk. In obviously tough times, people are prone to cut back on luxurious food and run for the nearest Costco. Counterargument: The company caters to an educated and wealthy customer base less prone to change shopping habits due to a softer economy. The company now trades at only a … read on »

VMWare (VMW) was once dubbed "the next Google," this company has seemingly failed to live up to the hype. At one time, revenue growth estimates exceeded 100%. This number has been consistently ratcheted down as competition has entered the market and enterprise technology spending has slowed. Once the crown jewel of parent company EMC, they have been hinting at spinning off the company completely. Counterargument: Expectations got way ahead of reality, but at the current price … read on »

Titanium Metals (TIE) is a producer of titanium melted and mill products. This light weight, super strong metal is used in products from airplanes to golf clubs. The outlook for industrial metals has cooled with the recent slow down in the global economy and aviation "woes." Titanium prices have been falling at the same time sales volumes dipped. Counterargument: I'm going to go out on a limb and say that declines in titanium are not permanent … read on »

Select Comfort (SCSS) develops, markets, and distributes a brand of mattresses and other bedding products. Previously the company posted consistently solid growth profitability, and sucessfully competed against industry titans like Sealy and Tempur-Pedic. Recently the company has lost its shine and posted a series of dizzying double digit sales declines. Counterargument: The company has actively been working to close under performing retail locations and trim expenses. Despite recent losses, the company is still producing positive operating … read on »

Ruby Tuesdays (RT) operates and franchises casual dining restaurants. They has suffered double digit same store sales growth. At the same time they have been laboring under increased capital expenditures in an attempt to update restaurants and compete with other seemingly similar casual dining concepts. Counterargument: They are still posting quarterly profits and predicting 2009 profits of 50 to 70 cents per share. Their menu is affordably priced and distinctive. As a personal bias, I simply … read on »

RH Donnelly (RHD) publishes print yellow pages directories plus similar online services. It recently acquired Business.com. The stock has crumbled as revenues in its core business threaten to decline. The company also labors under an enormous $10 billion dollar debt load which dwarfs the company's 100 million dollar market cap. Counterargument: The company produces a substantial amount of positive operating cash flow from its core directory business. Although revenue declines are widely predicted, in the past … read on »

This specialty retailer caters to a market of middle aged women under the Chico's (CHS) name plus a trendier crowd with its While House|Black Market stores. This stock was a former darling with perpetual same store sales growth. It's fortunes changed a few years back and it has been posted double digit same store sales growth declines since. Counterargument: The company has zero debt and 230 million in cash. They are still posting quarterly profits. Years … read on »

In addition to the eponimous bowling equipment, Brunswick (BC) is also a major manufacturer and marketer of recreational boats. With the consumer on the ropes, cutting back on boat purchases seems like an obvious choice. In the most recent quarter, revenues from the boat segment declined 6%. Counterargument: One of the other candidate stocks was similarly situated Winnebago, manufacturer of recreational vehicles. If you compare a one year chart of BC and WGO, you'll see that … read on »