The Motley Fool's CAPS investing service is one of the newest additions to the investing community at Fool.com, and it's another great way for investors to work together to beat the market. One of the features in CAPS allows users to set up a blog to talk about their picks, investing strategy, market view, or what they just had for lunch (if they so desire). I've scoured through some of the most recent blog posts in the CAPS universe to bring you some of the great content that CAPS players are putting out.
Intel is a buy
I thought we'd start off this week's CAPS blog rundown with some stock commentary. The following comes from UltraGreen, a CAPS newcomer who's already an All-Star. UltraGreen thinks Intel
I have been short on Intel till a few weeks ago. Now I am strongly going long for the following reasons.
1) Intel is getting back market share and it seems they will be able keep it for another year or so. AMD is late on [the] 45nm process and it will not have enough cash to close the gap. Gaining market share is the key to keeping margins up when capacity exceeds demand. The factories have to be fully utilized before they go obsolete; otherwise, the cost will hit the roof.
2) Intel is quietly developing a new non-volatile memory that will be a Flash killer. The new memory is much faster than Flash and last[s] longer in terms of how many times it can be written into. It may actually replace DRAM and SRAM in many applications and enables new exciting features in the current applications. The impact to Intel's bottom line may not show up in 2007 or even 2008, but once the news gets enough publicity, it will have its impact on the stock price."
Philip Durell, who looks for great companies on the cheap for the Inside Value newsletter, saw similar opportunity at Intel, and it is currently an Inside Value selection.
Though this is currently UltraGreen's only post, you can keep tabs on what he's thinking in the future by watching his blog.
How I pick stocks
Raytoei, who's making his second appearance on the CAPS blog review, had some thoughts to share regarding how he picks stocks. With just a little more than three years of investing under his belt, he certainly shares some sage advice.
For me right now, the top filter before I start doing serious due diligence is track record. Specifically, track record of revenues, earnings, and free cash flow. This is a simple and yet often ignored metric. You see, it is ignored often because the present and future is probably more important than the past, and most investors often buy based on an optimistic forecast rather than a consistent performance. [For fans of] Buffett, check out the following book excerpt:
"Watch that track record. The best judgment we can make about managerial competence does not depend on what people say, but simply what the record shows. At Berkshire Hathaway, when we buy a business we usually keep whoever has been running it, so we already have a batting average. Take the case of Mrs. B, who ran our Furniture Mart. Over a 50-year period, we'd seen her take $500 and turn it into a business that made $18 million pretax. So we knew she was competent. She's also 97 years old. In fact, now she's competing with us; she started a new business two years ago. Who would think you'd have to get a noncompete agreement with a 95-year-old?" (from The Book of Investing Wisdom)
This is only took a very small taste of raytoei's post. Be sure to check out the rest of it, along with his other posts, at his blog.
One quarter down, three to go
While I like to spread the love and bring new faces to the CAPS blog review, I couldn't help but have pickthis back for a second week in a row. His list of what he thinks the rest of the year could hold was just too good to pass up. His blog includes 20 "guesstimations," and here is a sampling of 10 of them:
1. Subprime gets worse, housing prices fall 8% for the full year.
2. Earnings growth in 2007 is closer to 0% than the 5% the geniuses are looking for.
3. Market falls 20% (from today's prices) by the end of Q3.
4. Dovish Fed statements in Q4 leads to market rally. 20% losses for year are cut to losses in the 5% range.
5. Newspaper stocks outperform broad market by wide margin as mass consolidation takes place.
6. Large cap value trumps all for the full year. Large cap growth admits, "I suck."
7. Ford(NYSE:F) bankruptcy rumors sprout up again. The debt to EBITDA ratio is nearly 17 times with minimal interest coverage and gigantic legacy costs coupled with mediocre, at best, products. Not a bold prediction.
8. Private equity candidates before the end of the year: Computer Sciences(NYSE:CSC) , Waste Management(NYSE:WMI) , Dow Chemical, First Data(NYSE:FDC) , Finish Line, Regis Corp, Ruby Tuesday, Inter-Tel, Exar, Sybase(NYSE:SY) . (Note: Since this was posted, First Data has already announced a transaction.)
9. Freescale blows up on Blackstone. Whoops! Equity Office Properties also gives them big headaches -- they could have done better in T-bills. Sam Zell drinks $100 bill milkshake.
10. Gold hits $800 per ounce sometime this year.
While I pulled a bunch of the good ones, the rest are definitely worth checking out (particularly my personal favorite, No. 20). You can read the rest at pickthis' blog.
Now it's your turn -- get off the sidelines, join CAPS, and start up your own CAPS blog to share your own knowledge and insights with the rest of the CAPS universe.
Fool contributor Matt Koppenheffer shares some thoughts of his own on his CAPS blog. He does not own shares of any of the companies mentioned. Dow Chemical is a Motley Fool Income Investor pick. First Data and Intel are Inside Value choices. Regis is a former Stock Advisor pick. The Fool's disclosure policy does not have its own CAPS blog, but if it did, it would outstrip the New York Times for editorial excellence.
