Caterpillar Q2 2012 Earnings Breakdown!

So I was able to put in a little work last weekend.  I listened to CAT and Westport's conference call.  Both calls were very positive.  I want to focus on Caterpillar's numbers tonight.  LOL!  Only because I wrote down the key stats of the call. Westport will come later.  Apple and Weatherford are still in the Que.  I can happily say all of these stocks are up quite substantially since the last time I wrote!

I know a lot of you are looking for a Westport (WPRT) update.  The progress towards natural gas infrastructure and the adoption of this phenomenal technology is gaining tremendous momentum!  If that isn't enough of a sneak peak, then all I can say is there was a reason for the +12.86% pop last Friday 08/03.  Westport has a great future!  I can say that my largest stake in all of my brokerage accounts is in Westport Innovations.  I'm putting my money where my mouth is!

Now let's move onto the Peoria Power House!  Better known as Caterpillar! (CAT)  Another great performance.  I wouldn't expect nothing less than greatness!

Let the list begin

-Had record quarterly profits. The highest profit in it's 87 year history
-yoy $2.54 eps vs. $1.52 (earnings per share) That's a 67.10% increase vs last year!
-Sales and Revenue came in at $17.374 billion vs. $14.230 billion (a 22.0% increase vs 2011)
-Full year outlook increased from $9.50 a share to $9.60 on roughly 68-70 billion in revenue
-Inventories decreased in China, as equipment has been allocated to other areas of the world
-Backlog of equipment is still at a solid $28.2 billion (An increase of 11% vs last year)
-Gas compression business is doing quite well
-Some mining equipment have lead times into 2014
-A 31% organic growth in mining

This is a small list that I derived from the call, but this is only the start.  From what I heard Caterpillar's management is confident in their earnings outlook through 2012.  They did provide caution in China and slow growth in United States and other areas of the world for 2012, but did mention they see a brighter future in 2013.  That being said we are investing for the future earnings!  With the continued monetary easing in China and other areas of the world CAT believes this will help improve the global economy, which should spark growth in the next 12-24 months.  With the current commodity prices many companies still continue to have an appetite for CAT's equipment.  The backlog is impressive and should be a positive indicator as to the strength of this company.

In my personal opinion CAT has more than came through this quarter.  Even with the economic headwinds this company was able to generate record profits.  The management is excellent and they know how to execute to create strong results.  Although caution was given the stock has been destroyed.  At $87.22 a share the stock is trading at a P/E of 9.75 vs the S&P 500 P/E of 14.6.  This is substantially lower.  CAT should easily be trading at the same P/E level as the S&P 500.  Put that into the equation and this stock would be trading at $130.00 a share.  Last earnings call I mentioned Caterpillar should be trading at $130.00 a share by year end and I believe it still has a chance.  If anything it should break through its 52 week high of $116.95 by year end.  A 35% price appreciation in the next 5 months is definitely not out of the question. 

In the end CAT is a steal at $87 a share and should be bought at these price levels.  Once it blows through $92 a share the momentum will carrier this solid company past the $100 mark and onto its 52 week high!  Plus the stock currently pays a dividend that provides a 2.40% yield

Currently I have a nice position in Caterpillar and plan on purchasing more in the near future.  I have confidence and so should you!

Have a great night!

Clay-

Current Holdings:
Cosi Inc. (COSI)-Monster Portfolio
Caterpillar (CAT)
Westport Innovations (WPRT) Monster Portfolio
Kinder Morgan Energy Partners (KMP)

I'm not a licensed financial advisor. All recommendations is strictly my personal opinion and the information is intended for learning purposes only. Invest at your own risk!

Westport Innovations +12.41% today

All I'm going to say is Westport Innovations (WPRT) up +30.70% in 4 days.  Looks like some big money is flowing back into this growth machine.  Keep a close eye on this fast mover.

Have a great night!

Clay-


Full Disclosure

Current Holdings:
Cosi Inc. (COSI)-Monster Portfolio
Caterpillar (CAT)
Westport Innovations (WPRT) Monster Portfolio
Kinder Morgan Energy Partners (KMP)

I'm not a licensed financial advisor. All recommendations is strictly my personal opinion and the information is intended for learning purposes only. Invest at your own risk!

Quick post... The pitfalls of growth stocks

So I made a big bet on Westport (WPRT) and thus far I have been wrong. LOL!  That's the risk you take when investing.  I moved in hard in the low 30's and have been punished by the short sellers.  Westport's earnings call for Q1 2012 on Tuesday was actually quite good in terms of progress.  I know they lost more money than they did vs. last year's quarter, but they are increasing sales quite nicely.  I think this stock has been taken down beyond what is right.  I know the nay sayers would argue that this company hasn't turned a profit in years, but you have to fuel the growth some how!  You need cash.. And enough cash is what they have.  If their wasn't progress than I would say the heck with this stock.  I believe Westport will surprise everyone especially the short sellers in the coming weeks.  I'm looking for a short squeeze in the near term.  There needs to be a catalyst to change the aggressive downward trend.  I'm confident WPRT's management will  have some good news to get the big fish investors back on board.  Plus a change needs to be made because I'm sick of losing money! 

I'm still a big Westport Innovations fan even if I lose a little cash in the short term.  I didn't expect this high growth engine to get cut in half in the past few months, but it happens to the best of them.  The thing with growth stocks is as followed...

When any negative news poses a threat to the growth of a fast growing company investors do not hesitate to turn on a once loved company.  The money will flow out like a huge hole in a boat and the short sellers will step in to accelerate the downturn.  When this happens the momentum takes over and stocks go down until the sellers are exhausted.  This is what happened to Westport.  Other growth companies have gone through the same thing.  Here are just a few stocks that had similar rapid downfalls.

Starbucks (SBUX)
Hansen Natural (MNST) AKA Monster Energy Drinks
NetFlix (NFLX)
Taser (TASR)

A few of the companies have rebounded nicely from when they plummeted, but rapid growth can't continue forever and neither can straight up stock prices.  It hurts to see your money slip through your hands from time to time, but the excitement of catching the next big trend is always worth the risk in my eyes.

Stay positive with WPRT.  Loyal shareholders will prevail.

Have a great night!

Clay-


Full Disclosure

Current Holdings:
Cosi Inc. (COSI)-Monster Portfolio
Caterpillar (CAT)
Westport Innovations (WPRT) Monster Portfolio
Kinder Morgan Energy Partners (KMP)

I'm not a licensed financial advisor. All recommendations is strictly my personal opinion and the information is intended for learning purposes only. Invest at your own risk!

Stock Talk In 150 Words Or Less

-Apple (AAPL) has yet another blow out quarter.  $39.2 Billion in revenues.  35.1 million iPhone’s were sold in the 1^st qtr of 2012.  Boom!

-Weatherford International (WFT) had a solid quarter.  Revenues came in at $3.6 Billion, which was 25.87% higher than the same quarter last year.

-On deck for tomorrow is Caterpillar the Peoria Powerhouse!  I’m very eager to see how well CAT did in the 1^st quarter.   I need some good numbers to blow past the 52 week high of $116.95.  At $108.40 its 29.15% off my price target by year-end of $140.  Let’s go CAT!!!

-Now after CAT is all said and done the plan is to listen to the conference calls to project the future trend of my closely followed companies

P.S.  Westport… What the heck!!!  All I can do is grit my teeth in disgust and wait patiently for the tide to turn.

Full Disclosure
Current Holdings:
Cosi Inc. (COSI)-Monster Portfolio
Caterpillar (CAT)
Westport Innovations (WPRT) Monster Portfolio
Kinder Morgan Energy Partners (KMP)

I'm not a licensed financial advisor. All recommendations is strictly my personal opinion and the information is intended for learning purposes only. Invest at your own risk!

I'm Back!!!!

I first would like to start out and say it’s great to be back!  Do to some unforeseen circumstances I was unable to blog for the past 4 weeks.  Unfortunately the past 4 weeks have been devastating to the stock market, at least for those stocks that I follow.  The only stock that held up was Apple (AAPL), which has pulled back off its high of $644.00 a share.  No worries as Apple can buck the trend of most markets as Apple is in a world of its own!

Earnings have started off pretty well and it appears as of today that buyers are starting to step back into the market.  The headlines have been pretty negative as worry that the economy is slowing in the US, China, etc, housing issues, high oil prices, European trouble, and banking issues to name a few.  If I listened to this garbage day in and day out I would never invest in stocks.  As an investor you have to look past all the negative news and filter out all the junk that is being put onto the news wires.  I scan each of my investments throughout the week and look for anything that could negatively impact the business.  If the story hasn’t changed I continue to own that particular investment.  Of course the price of the stock may go down during that period of time, but that is to be expected.  The reason I’m bringing the subject of negative news is mainly focused on the recent price action in Westport Innovations (WPRT)

Westport has been recently brought back down the earth.  After hitting an all time high of $50.19 on March 21^st 2012 it has plummeted roughly 33% as of yesterday’s close of $33.47 a share.  Talk about being punched in the gut!  Very disappointing!  This downturn could force someone to quit investing in stocks all together.  I’m here to tell you not to panic.  This has happened before too many high flying growth companies and they have rebounded nicely after a sharp downturn.   Since I started investing in Westport back in July of 2010 the stock has had extreme volatility.  On 4 occasions WPRT has went from peak to trough in excess of 25%.  Below is a list of date ranges to where WPRT traded crazy!

July 27^th 2010 high $21.34
Aug 25^th 2010 low $15.51

Equates to a 27.32% downturn

April 6^th 2011 high $27.90

June 8^th 2011 low $19.66

Equates to a 29.53% downturn

July 13^th 2011 high $28.05

Aug 8^th 2011 low $20.01

Equates to a 28.66% downturn

Sep 20^th 2011 high $34.23
Oct 4^th 2011 low $22.63

Equates to a 33.88% downturn

As you can see this isn’t out of the ordinary for Westport to trade from one extreme to the other.  Don’t worry about the wild price movements.  If negative news comes out that is detrimental to the company then I would be worried.  Yeah I would like to side step downturns, but sometimes they aren’t avoidable.  The story hasn’t changed for Westport.  I wouldn’t put too much time into the recent news that Cheniere Energy (LNG) is building the first LNG export facility in the US.  The US has an abundance of natural gas and one facility isn’t going to drive natural gas prices up over night.  As of today natural gas has hit an all time low of $1.95!  Some say it could hit $0.75.  Westport will still benefit even if the price of natural gas goes up 50% it’s still a $1.00 cheaper than a gallon of gas.  Also, remember that 150 fueling stations are being built as we speak to support the natural gas revolution.   That’s right millions of dollars are being spent on natural gas taking hold as a major alternative to foreign oil.  Be patient and WPRT will give back to loyal shareholders in the near future.

Clay-


Full Disclosure

Current Holdings:
Cosi Inc. (COSI)-Monster Portfolio
Caterpillar (CAT)
Westport Innovations (WPRT)-Monster Portfolio
Kinder Morgan Energy Partners (KMP)

I'm not a licensed financial advisor.  All recommendations is strictly my personal opinion and the information is intended for learning purposes only.  Invest at your own risk!

Westport Innovations (WPRT) Insider Buying!!!

Westport Innovations is back on the radar! I just got done performing my daily research of my current holdings and I came across some information that must always be shared.  That's right!  Insider buying. 

I'm surprised I didn't catch this over the weekend, but Kevin Douglas one of the largest shareholders purchased 500,000 shares or $22.3 million worth of stock.  That is by far one of the largest insider purchases I have ever seen.  The last time Kevin Douglas purchased stock was back on 07/16/2010 at much lower prices.  Obviously, this guy made a ton of money since then!  This recent purchase shows tremendous confidence in WPRT!  $22.3 million worth of confidence.  That's a lot of money to put on the line no matter who you are.  Although, the stock has run up almost 10% since the buy, this purchase adds to the positive outlook for WPRT in 2012.

Money has been pouring into this company like crazy!  Since the beginning of the year this stock has run up +46.54%  All I can say is cha ching... $$$

Have a great night!  Below is an update of my Monster Portfolio as of Friday 03/16/12

MONSTER PORTFOLIO 2011

Balance: Inception 01/07/11
$1,977.32 Stock
$13.65 Cash
Total $1,990.97

Balance: As of Friday 03/16/12

$2,988.66 Stock
$8.96 Cash
Total $2,997.62

Since Inception: 20.15%

Back out cash inflow and we have a balance of $2,392.12

Clay-

Full Disclosure

Current Holdings:

Cosi Inc. (COSI)-Monster Portfolio
Caterpillar (CAT)
Procter & Gamble (PG)
Westport Innovations (WPRT)
Weatherford International (WFT)-Monster Portfolio
Kinder Morgan Energy Partners (KMP)

Westport (WPRT) will shine in 2012

Hello everyone and welcome back!

First off I would to say I just bought some Westport Innovations (WPRT) in after hours today. I've been meaning to get back in and now I have some skin in the game. Very exciting!

Today I'm going to list the key points and the reasons why I believe Westport will shine in 2012. Here are the numbers of their recent earnings call.

Recent quarter results

-Record Revenue on the quarter $100.6 vs. $39.5 for the same period last year, an increase of 154.7%

-the key revenue drivers were Westport LD, CWI, and Westport HD

-Westport LD $22.6 million vs $7.8 million prior year period. An increase of 189.74% in revenues

-CWI $57.7 million vs. $31.1 million prior year period. An increase of 85.53% in revenues

-Westport HD $10.5 million vs. $0 prior year period

Full year results

-Consolidated revenues were $264.7 million for the twelve months ended December 31, 2011, an increase of 83.3% over the $144.4 million reported for calendar 2010.

-CWI revenue was $163.9 million, compared to $117.1 million in 2010; an increase of 40.0%.

-Westport LD revenue was $66.6 million for the twelve months ended December 31, 2011, up from $16.3 million in calendar 2010, an increase of 308.6%. Of this increase, $34.4 million came from the acquisition of Emer and AFV in 2011.

-Westport HD revenue was $19.9 million for the twelve months ended December 31, 2011, up from $7.0 million in calendar 2010, an increase of 185.4%.

-Weichai Westport Inc. (WWI) revenue reached $109.8 million for the twelve months ended December 31, 2011, up from $44.8 million in calendar 2010; an increase of 145.1%. Note that WWI is not consolidated and is accounted for using the equity method. 

All numbers were pulled from the earnings call transcript on westport.com
http://www.westport.com/investors/financial

Key points from conference call

-2012 Revenue guidance between $400-$425 million

-Launch of Ford's F250, F350 in the 2^nd qtr. should add about $5 million in revenues for 2012

-trucking infrastructure is building faster in China than in North America, which means a large addressable market to be had in China

-Increased international growth

-interest developing in Europe due to high diesel prices

-engine in development to run engine for rail in 2013 and to be up and running in 2014

The information I have provided above is more than enough to tell you WPRT will thrive into 2012. The growth of each of their product lines is staggering. This environment is perfect for WPRT to capitalize on high oil prices. The management team did a phenomenal job in 2011 and have set this company up for success. Companies can no longer ignore the fact that natural gas is drastically cheaper than diesel. It makes complete sense for transportation to utilize a cheaper fuel. Westport already has quite a few big players on their side and it appears the automotive industry is taking notice.

When I first started investing in Westport I thought the United States government passing an energy bill would help WPRT. It's been over a year now and look where we are. Westport doesn't need the U.S. government to succeed and they proved that in 2011. They have so much going on I can't even keep track of all the companies that have shown interest in Westport's technology. The numbers don't lie. Accelerated revenue growth is all I need for this gem of a company. The cash they are using is fueling the growth of the business.

Although, WPRT reported a net loss of $60.2 million or a $1.26 a share on the year, you have to take into account the growth factor. They projected 2012 revenues to be roughly 50-60% higher vs. 2011. That's a whole lot of growth! Many companies start off losing money year after year, but as long as rapid growth is part of the formula and progress towards profitability continues there is no need to worry. What Westport is selling is a need. A need to cut fuel costs and reduce the reliability of foreign oil. It's a product that benefits both parties, but the big beneficiary will be WPRT after all the smoke clears!

What I'm trying to say is buy Westport and you should have some extra cash in your pockets for 2012. Any purchase between $37-$42 a share would be a solid price to get in on WPRT.

Have a great night!

P.S. I loaded up even more on WFT last week.

Clay-

Full Disclosure

Current Holdings:

Cosi Inc. (COSI)

Caterpillar (CAT)

Procter & Gamble (PG)

Westport Innovations (WPRT)

Weatherford International (WFT)

Kinder Morgan Energy Partners (KMP)

WPRT-The Growth Machine

I was able to sift through Westport Innovations (WPRT) recent earnings release and full year results over the weekend.  I have to say that this company is growing like crazy.  Although the company hasn't turned a profit, the tremendous growth keeps this stock powering higher.  With crude oil prices highly elevated Westport's popularity will only increase with companies looking to save money on fuel costs.  That being said I believe 2012 will be another year of strong growth for WPRT. 

Come back on Tuesday as I will have the specific details on Westport.  More $$$ will be made in the future.

Clay-

Apple has done it again!

Apple continues to amaze me!  Here is the breakdown of their recent earnings report today.

-Record quarterly revenue of $46.33 Billion on profits of $13.06 Billion
-$46.33 Billion vs. last yrs results of $26.74 Billion equates to a 73.2% increase in revenues
-Gross margins were 44.7% vs. last yrs results of 38.5%

Sales Results by product

-37.04 million iPhone sold- 128% increase vs. last year
-15.43 million iPads sold- 111% increase vs. last year
-5.2 million Macs sold- 26% increase vs. last year
-15.4 million iPods sold- 21% decrease vs. last year

-Numbers were derived from apple.com

On the surface Apple looks extremely strong, but I still must listen to the conference call.  I did hear on the way home from work that Apple may have a plan for the large amount of cash they have on hand.  That current number is a solid $97.7 Billion.  My vote is to pay out a dividend to all of the loyal shareholders!!! LOL! 

Apple is trading at $451.20 a share in after hours.  Up +7.34% Another 52 week high

It seems like the 52 week high trend continues when I'm out of my favorite stocks.  I have 0 shares of Apple (AAPL) at the moment.  Oh wait!  And I have 0 shares of Westport Innovations (WPRT), which conveniently hit a 52 week high as well closing at $38.06 a share.  Up +6.91% on huge volume.  It appears the big boys are betting Westport is going to go higher.  I'm guessing that with the current prices of natural gas vs. oil prices that natural gas is becoming very enticing.  Enticing as a bridge fuel to replace the reliance of crude oil.  It just so happens that President Obama will be addressing energy and job concerns tonight at 9:00pm.  The State Of The Union Address could uncover the recent upside action in Westport today. 

Congratulations to those that own Apple and Westport as of today.  I know someone is making money! 

P.S. Weatherford is currently on my radar.

Happy Trading!

Clay-

Sidelined For Earnings Season!

So Westport (WPRT) proved me wrong as the stock was playing tricks on me closing up +5.02% today!  This stock has been a firecracker since the beginning of December and yet it still pushes higher.  I love this company, but I can't comprehend as to why the stock continues higher.  I haven't seen any type of catalyst for Westport and I can't back this stock at the current price.  I can't really back any stock at the current price levels.

I'm holding strong on the sidelines with plenty of cash to invest, but I haven't had an opportunity to get back in.  I'm going absolutely crazy right now! I missed my opportunity to get back into WFT yesterday as I was going to play the oil service earnings of Schlumberger (SLB) on Friday.  SLB earnings determines the direction of the oil service companies.  If SLB is positive the rest of the competition goes up as well.  With Weatheford up +5.96% today it would an idiotic move to chase this stock into Friday. 

Another key move that I missed was Caterpillar (CAT) as the stock has moved up +13.56% from the last day I was in the market with my Monster Portfolio.  12/22/11 is the date.  That's right I have been out of the market since 12/22/11. 

The only thing I can do now is listen to all of the conference calls to determine my next investment opportunity.  The best thing I can do is be patient.  Right? 

Earnings Calendar-  Here is a helpful link to get the dates on the upcoming earnings releases

http://biz.yahoo.com/research/earncal/today.html pulled from Yahoo Finance 

I will be listening to the conference call on the following companies

SLB Earnings 01/20/2012

AAPL Earnings 01/24/2012  52 Week High today...

CAT Earnings 01/26/2012

WFT Earnings 02/21/2012

Have a great night!

"When in doubt buy more"

Clay-

Monster Portfolio Week 44 Results

MONSTER PORTFOLIO 2011


Balance: Inception 01/07/11
$1977.32 Stock
$13.65 Cash
Total $1990.97

Balance: End of Week 43 11/11/11

$2,495.64 Stock
$19.92 Cash
Total $2,510.56

Since Inception: -4.29%

Back out cash inflow and we have a balance of $1,905.06

Well I hope some of you read my piece on Westport Innovations (WPRT) last week!  In the last 5 days the stock has surged +10.79%.  Most of the gains came from today, but who’s counting. LOL! Money is money.  It’s definitely exciting to see a stock move rather quickly, but as many of you may know I always tend to sell into a big move like today.  Westport closed up +8.59% just a few minutes ago as I had the day off.  This means I was able to watch this stock blow up today.  Very exciting!

I was very busy today as I purchased more Apple (AAPL) as I believe the stock price is currently undervalued.  I also picked up some Westport in my other accounts.  Then as the day went on I ended up selling a portion of my Westport holdings in my Monster Portfolio.  The main reason is that I won’t be able to watch my accounts over the next few days due to limited internet access.  I would hate to come back on Sunday to see my portfolio lower because I failed to sell some of my stock.  

I just found out the recent surge in Westport may have something to do with a tax credit plan.  See for yourself.  http://finance.yahoo.com/news/Clean-Energy-Supports-bw-4144486892.html?x=0&l=1

It appears the tax credit for natural gas vehicles has been put back into play, which adds tremendous value to Westport.  Although, Westport moved rather dramatically I can almost bet that this trend will continue for another few days.  My recommendation is to watch the volume and if you see the stock waiver at all I would sell into strength. 

P.S.  For those of you who are looking for a great dividend yield I also picked up some Kinder Morgan Energy Partners (KMP) last week in my IRA.  Currently the dividend yield is at 6.20%.  This stock is great for people who like to sleep well at night. LOL!

(All research was done at yahoo finance)

Have a great night! 

Clay-

“When in doubt buy more!”

Current Holdings:
Apple (AAPL)
Cosi Inc. (COSI)
Weatherford International (WFT) (Sit tight with WFT it will go up eventually)
Westport Innovations (WPRT)

Positive Westport Research-Week 43 Results

MONSTER PORTFOLIO 2011


Balance: Inception 01/07/11
$1977.32 Stock
$13.65 Cash
Total $1990.97

Balance: End of Week 42 11/04/11
$1,506.28 Stock
$1,059.87 Cash
Total $2,566.15

Since Inception: -1.52%

Back out cash inflow and we have a balance of $1,960.65 

Stocks are extremely resilient over the past few days!  I’ve seen a lot of strength in the energy sector with oil reaching $96.87 a barrel.  This is the strength I have been looking for.  The overwhelming need for energy brings Westport Innovations (WPRT) back into mind. 

I know I haven’t covered WPRT in quite some time, but you can’t deny the fact that Westport has been performing extremely well announcing big name deals with Caterpillar, Shell, GM, and Ford.  WPRT has also made some strategic acquisitions and Chesapeake/Clean Energy announced it plans on investing $300 million into LNG refueling infrastructure.  That being said a small $1.33 Billion company like Westport has plenty of room for growth. 

Westport’s recent earnings announcement had a lot of good information indicating that Westport sees strong growth continuing on into 2012.  The CEO David Demers sees 2011 as a tipping point for Westport.  Other positive remarks are as followed

-record revenue for the quarter of $80.2 million
-80% Growth year over year in revenue
-raised guidance on the year to generate $240-$250 million in revenue
-record revenues for the CWI business unit with $49.2 million in sales
-shipments of 85 Westport HD units up from 19
-expectation of more HD units to ship in the 4^th qtr

The list above is just a glimpse of what I researched from Westport’s earnings.  I wish I had the opportunity to ride this big move since I have been out of WPRT since July 6^th when the stock closed at $24.55, but once it took off I never saw a chance to get back in.  Now is the time as the stock is well of its 52 week high of $34.23.  17.67% off the high to be exact!  I will be looking for another chance to buy even more WPRT very soon. 

My last piece of evidence that Westport is going higher is what the CEO David Demers had to say about the investment of LNG infrastructure in regards to Chesapeake, Clean Energy and Shell.  Here is what he had to say “That’s a lot of infrastructure, a lot of fuel and there’s going to have to be a lot of trucks to use up that much fuel.”  That is all I needed to hear.

Have a great night! 

Clay-

“When in doubt buy more!”

(All research was derived from Yahoo Finance and Westport.com)

Current Holdings:
Apple (AAPL)
Cosi Inc. (COSI)
Weatherford International (WFT)
Westport Innovations (WPRT)

Portfolio Trade Action! WPRT

I bought some Westport Innovations (WPRT) today!  I tried to pick some up on Friday, but my order came in a little low and I missed about a 6% price move.  I listened to Westport's conference call last week and I really liked what they had to say.  I'll explain a few details tomorrow. 

Weatheford (WFT) up 3.03% today. Keep the money flowing!  Although I decreased my stake in WFT I'm still very happy with the outcome.

Clay-

Monster Portfolio Week 42 Results

MONSTER PORTFOLIO 2011

Balance: Inception 01/07/11
$1977.32 Stock
$13.65 Cash
Total $1990.97

Balance: End of Week 41 10/28/11
$1,506.05 Stock
$1,059.87 Cash
Total $2,565.92

Since Inception: -1.53%

Back out cash inflow and we have a balance of $1,960.42. 

Welcome back everyone!  So I was able to dig into Weatherford’s (WFT) 3^rd qtr. earnings transcript last week and I’m here to say that WFT appears to be doing all of the right things. (All of the right things that are within their control.)  The positives outweigh the negatives.  First I will cover the negatives to get them out of the way.  These are the issues that negatively impacted their earnings.

Negatives

1.      An increase in the effective tax rate reduced the earnings by $0.01

2.      Foreign exchange book losses accounted for a $0.03 hit against earnings

3.      Middle East, North Africa, and Asia Pacific revenue declined $45 million due to increased start up costs in Saudi Arabia, Kuwait and Iraq, contracts in Algeria lapsed and WFT was forced to demobilize and relocate outside of the country, and lastly higher incurred costs in Iraq due to shut down costs, idling costs, and problems with recent started operations

4.      Net debt increased roughly $301 million for a grand total of $7.3 billion in debt

Positives

1.      Quarterly revenue reached a record high of $3.4 billion

2.      Year on year revenue growth of 33%

3.      Sequential quarterly growth of 11% (Always a positive to see revs higher on back to back quarters.)

4.      Continued positive outlook for North America (Conservatively)

5.      Positive outlook for Canada which has lagged for years

6.      Increasing margins and volume in certain product lines including artificial lift, production optimization, formation evaluation, and open hole completion for North America in 2012

7.      Positive outlook in Latin America, Russian, and European operations

8.      Increased activity in North Africa (Libya and Algeria)

9.      Margin improvements internationally for the 4th qtr. and strengthening into 2012

10.  15-20% of North America earnings is from fracking, which means more room for growth

In conclusion of the earnings I still continue to believe that WFT is a viable investment.  There is much room for improvement!  That being said I believe Weatherford is on the right track to increase revenue and improve their operations.  The one thing that is a slight concern is the increased debt, but as a company grows to increase market share in a competitive industry taking on debt to grow is quite normal.  If the debt to equity continues to increase passed Q3 of 2012 I may change my tune.  So my recommendation is to continue to buy WFT on the dips well into 2012 as the strength in earnings will continue with elevated crude prices.

I would also like to disclose that I sold a large stake in WFT on Thursday and Friday as selling into strength is what I do.  This was mostly because I had to much invested in WFT and I had to reduce my risk.  Since October 4^th Weatherford has increased in value by 35.97% as of Friday’s close.  A run like that deserves a little profit taking.  You have to lock in your profits while the gettin is good!  Remember I try to think like the big fund managers. And currently they are selling as we saw some profit taking today.  My objective is to make as much money as I can while reducing my risk along the way!

Westport Innovations (WPRT) reports tomorrow.  Depending on the outlook I may try to sneak back into the speculative alternative energy play for the remainder of the year.  I still have a goal to finish up 10% on the year and I have to pick my stocks wisely as I’m running out of time. LOL!


All research was derived from Weatherford’s website and can be viewed by clicking on WFT (hyperlinked)

Have a great night! 

Clay-

“When in doubt buy more!”

Current Holdings:
Apple (AAPL)
Cosi Inc. (COSI)
Weatherford International (WFT)

Monster Portfolio Week 36 Results

MONSTER PORTFOLIO 2011


Balance: Inception 01/07/11
$1977.32 Stock
$13.65 Cash
Total $1990.97

Balance: End of Week 35 09/16/11

$2,413.95 Stock
$100.38 Cash
Total $2,514.33

Since Inception: -4.13%

Back out cash inflow and we have a balance of $1,908.83. 

Last week was great for my portfolio as I cut my losses from being down -9.52% to close Friday down slightly at -4.13%.  That’s a +5.39% to the upside.  Yesterday seemed as if I would continue to make money, but my excitement was tempered by the last few hours of trading today.  With the Fed talking to tomorrow sell offs late in the day are normal. 

I did however enjoy  Apple (AAPL) continuing on hitting another 52 week high closing at $413.45 a share.  Even though Apple has been on a phenomenal run I believe this stock will continue higher.  Weatherford (WFT) on the other hand is driving me crazy!  My confidence is extremely high with WFT, but yet this stock doesn’t want to budge.  I’m not sure what is holding up the oil service stocks, but the selling cannot last.  It won’t!  The demand for oil is still strong. Oil service is a long term trend and I’m not backing down from WFT.  If anyone has money to put to work, that is where I would go.  WFT! WFT! At $15.56 a share this stock is a steal.  I liked it at $20.00 a share.  So if you buy it now you will have a solid gain in excess of 25% by the time it reaches $20.  That’s right you have a huge advantage on me! 

P.S. Westport (WPRT) is slightly up from when I advised to sell on Thursday and today was the first sign of weakness.  Please stay away.

Clay-

“When in doubt buy more!”

Current Holdings:
Apple (AAPL)
Cosi Inc. (COSI)
Weatherford International (WFT)