The Motley Fool's CAPS investing community is one of the newest additions to the investing smorgasbord 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 the CAPS players are putting out.
So there I was, and it hit me...
Our first stop is at the blog of LookMomBoogers (really), who writes about market direction and where we may be headed in the next few months:
"The past few days, or more specifically mornings, I have been watching CNBC. There is this buzz generated that we are riding on this 'bubble' that's going to burst (SOON). Now I'm no prognosticator -- I'd do much better in my annual March Madness Pool if I was -- but here is what I expect: the bubble is not going to burst, it will lose some air because it's not a bubble kids, it's a balloon.
"In fact, I'm thinking this is good to let a little air out of this thing. That way I can start deal shopping again. I'm thinking the first week in March will be a value hunting week in CAPS and in the Booger household. What's been going on in the market the past few days may continue into next week, but as long as it doesn't get crazy we are not going to pop this balloon."
Read more from LookMomBoogers.
The next stop takes us to rmenschel, a CAPS All-Star ranked in the top 3% of all CAPS players, who shares his thoughts on NutriSystem
"NutriSystem is a provider of a weight management system based on a portion-controlled, prepared-meal program.
"Its returns are fantastic, margins are very high, growth is outstanding, and it has almost no debt. It's also currently sitting with 30% short interest. Cash flow is well over the $2 per share mark, with free cash flow at $1.61 per share. Insiders own/control 12% of the stock and Reuters estimates its PEG at 0.50."
According to rmenschel, despite good 2006 results, concerns over the company's outlook for Q1 2007 sent the stock down in late January. This movement was reversed somewhat by an announcement of strong full-year 2007 guidance and a share buyback program. Multiple analysts are rating the stock a "buy," including Lehman Brothers, and price targets are in the low to mid-$70s. Rmenschel concludes with:
"Looking forward, 'The company said it expects quarterly earnings from 88 cents to 92 cents per share, marking a jump of at least 47 percent year-over-year. Revenue for the quarter is forecast at between $205 million and $215 million.'
"Though it's up significantly since last week's announcement, they're still nowhere near December's highs. This stock should climb again -- I'll be surprised if it doesn't climb 33% to $60 by end of year, and wouldn't be surprised to find it climbing 50% to 60% toward $70 to $73."
For more thoughts from rmenschel, click here.
My dumbest investments
The third and final stop on today's blog tour takes us to the first of a great three-part series raytoei is running on his CAPS blog called "My Dumbest Investments." I really like the humility that raytoei shows in this series -- as investors, we're all bound to make mistakes, and learning from them is the only way we can avoid making them all over again. The following are a few excerpts from his entry:
"Since I started investing in October 2003, I have probably made more investment mistakes than most, and below are my more memorable losers and the lesson learnt. By 'losers,' I mean most of them returned -50% and some were spectacular 80% losses. Thankfully I have had more winners than losers. But as Ben Stein's Mom would say, 'We do the best we can, and when we make a mistake we don't cry about it. Don't worry, you'll do it again.'"
On LeapFrog Enterprises
"Lesson learnt: Like kiddy clothes, most parents are impartial towards brands of toys. And if you throw in technology-based toys like the LeapPad, then these companies have no economic moat. Fisher-Price (a Mattel
(NYSE:MAT)company) came out with a better talking book and LeapFrog could not compete except to discount heavily. The results were predictable -- margins fell and earnings shrank. Lesson number two: epinions.com can't always be trusted."
On Krispy Kreme Doughnuts
"Lessons learnt: First, a yummy product doesn't mean it is a good stock. Second, if only I had bothered to read up on the cash flow statement, I would have noticed that free cash flow was diminishing, which is an obvious red flag."
On Bradley Pharmaceuticals
"Lesson learnt: Write down the reasons why a company is attractive, read up all about the company and the industry, and read the 10-K, even if it means reading only the Management Discussion and Analysis (MD&A) section."
On Friedman's (now bankrupt):
"Lesson learnt: Flee away from SEC investigations. It's like turning on the lights in the kitchen at night and finding a cockroach -- there's always more than one cockroach lurking somewhere. Yuks!"
For more of this great series and other musings from raytoei, click here.
Now it's your turn! Get off the sidelines, join CAPS for free, and start up your own CAPS blog to share your 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. Mattel is a former Motley Fool Inside Value pick. Krispy Kreme is a former Stock Advisor selection. The Fool's disclosure policy shines its kitchen light constantly to keep you in the know.