Vinod Kurup

Hospitalist/programmer in search of the meaning of life

Aug 1, 2005 - 3 minute read - Comments - investing quarterly

Quarterly Sells

I try to do my portfolio cleanup every 3 months, selling any companies that don’t fit my strategy and buying new ones that do. So, I’m selling 5 stocks. I haven’t decided on my buys yet, but I’m looking at BAMM, BZ, CALM, ESP, PWX, SCX and SRT (among others).

Stock Purchase Date Total Return Reason for sell
Ameron (AMN) 7/7/2004 11.27% No improvement in the financial results over the past year. I got sick of their ridiculous executive compensation. CEO took home $17 million last year, while net income for the company was only $13 million.
Ashworth (ASHW) 7/7/2004 0.75% I probably should’ve sold this back in February or May when it was in the 11’s. Instead I sold it about where I bought it at $8. Still undervalued, but its fundamentals aren’t as promising as they were a year ago. They’ve taken on an acquisition which seems a little outside their circle of competence. They’re a golf clothing company and they bought a hat company specializing in college sports and NASCAR. Doesn’t quite fit. Share count is increasing, no free cash flow, taking on more debt, return on assets decreasing, CFO left. I claim failure on this one.
Building Materials Holding Corp (BMHC) 9/13/2004 246.94% It’s hard to sell a stock that has been on such a run, but it’s even harder to watch a stock tank when you knew you should have sold. Of course, I have no way of knowing if BMHC will tank, but I do know that it doesn’t meet my criteria for a stock in my portfolio. I bought this last year because I noticed that it had a PE ratio < 10, a P/B ratio near 1, and it was paying a dividend. The P/B ratio is now over 3, so it’s no longer such a great value. It’s benefitted from the great housing market nationwide, but I don’t think that can last forever. Again, BMHC may go up from here, but that’s OK because I’m only interested in owning stocks that fit into my philosophy - small and cheap.
Flagstar Bank (FBC) 11/1/2004 -8.14% See my post about Flagstar earlier this summer. On top of that, they guided for an EPS this quarter fo $0.45 to $0.60 and got $0.44. They still have no information on why the auditor quit. They’re hiring 2 big-4 accounting firms to help with compliance, in addition to another auditor for their general financial statements. I also don’t quite understand how to evaluate financial companies, so I’m bowing out now.
Merck (MRK) 9/25/2004 -2.00% I bought this before I’d decided to focus on small caps. Merck just doesn’t fit into my philosophy (small value). I think the Vioxx concerns are overblown, but I also wish Merck would’ve been more upfront with physicians from the beginning. I think taking Vioxx off the market was the right thing to do, even though I think Vioxx probably has some value in certain uses. Bottom line is that I’m a small cap investor, so no more Merck.

Here are my current holdings.

Stock Purchase Date Total Return (so far)
Deswell Industries(DSWL) 9/20/2004 17.09%
Patrick Industries (PATK) 2/1/2005 -6.48%
Outlook Group(OUTL) 2/1/2005 33.09%
All American Semiconductor (SEMI) 2/1/2005 -2.09%
Duckwall-ALCO Stores (DUCK) 2/1/2005 24.21%
Cobra Electronics (COBR) 2/1/2005 15.92%

Comments from old site

What do you think about this stock

Hey Vin, what do you think of SBG(Sinclair Broadcast Group)

Its the company that owns Channels 18 and 24(my employer).

Andy Drout 2005-08-05 21:12:25

Hey Guy!!- Check out SSYS

Hey Man- what do you think of SSYS?? Hopefully I will have a phone soon so I can surf/call people!!

P.S.- Gotta love Sandisk SNDK!!!!!!!

Gerald Cherayil 2005-10-24 16:18:27