My Own Analyst

CRK

While it's not my highest confidence call at all, the sell-off on CRK seems a bit overdone.  I was patient in saying that last week.  Natural gas prices have been weak.  It's hard to believe, but this has gone from 52-week high to 52-week low in just three weeks on no specific news.  Perhaps my 38 target needs to be revised somewhat lower, and perhaps gas prices will stay weak for a while, but the stock is trading below tangible book value and also has a higher reserve value in my view than the current enterprise value. 

Savient Question

Igor asks:

I am curious what you think would be the best strategy around SVNT. You mentioned that nothing will likely to happen for the next three quarters. Will it continue bleeding and it is better to cut losses now or wait for it to go up after the initial reaction to earnings?

I think that my updated target that I shared this weekend (6) is a good clue as to what I am thinking for now.  Given the extreme weakness in many stocks, I think that we will get an opportunity in Top 20 to sell SVNT, which is pretty oversold now, to buy into another name.  Given that it is only just over 1% of the entire portfolio and that I don't expect it to keep dropping like a stone, I don't feel compelled to address it in the model immediately.  If you were to own a larger position, then that's perhaps a different question.  The circumstances for the stock began changing 3 months ago and got slightly worse this quarter (as far as when real sales show up).  The circumstances for the market are probably the bigger concern at the moment, as small-cap biotechs don't fare well at all in bear markets typically.

SKX - It's all in the inventory

Will report back after the call, but inventory fell sequentially on higher-than-expected sales.  Earnings were worse than expected, but that's not that important.  Clearing out inventory is the key factor.  I remain hopeful that this one is headed back to a more normalized 15PE on normal earnings once they get past  this issue.  Remember, the two pair I purchased were AFTER this report - good things ahead!

MPR: JD Wants to Know

Subscriber JD asks:

Can you give your quick thoughts on MPR. I sold my position when it was close to $12.00 and am looking to re-enter the position. You report on them is almost 2 years old (have not been a subscriber that long) and they last reported earnings on December 2, 2010 so they should report any day now.

I like MPR a lot.  The entry down here is nice - I see support as right here.  The report will be later in March - it's year end, so don't add 3 months to the last report.   I have a 15 target based on cash and a PE of 18 - it's real close to be in the Top 20.  I should have included it with that list from earlier today.

34 Stocks with Low-debt, High Return on Capital and Not Extended

I contributed an article to Morningstar.  Several of the holdings of Top 20 and CG/B are featured.