Hello Everybody,
As the market condition improving, I used my computer program to select two buying candidates for next week. Here they are:
KAMN
USM
Please remember, these are the selections made by a computer based on various fundamental and technical criteria, in other words they are mechanically selected. So I expect you to do some homework and make your own decisions.
These selection were based on Stockbee posting on Tuesday, August 07, 2007, in the category of "up 25% plus in last 65 days".
Enjoy,
Mkt Swimmer
Friday, August 10, 2007
Moment of Truth
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10 comments:
I also scaned a newer list:
Wednesday, August 08, 2007
A powerful surge (110 stocks in the Episodic Pivots scan) and generated this interesting stock:
CRZ
MktSwmr
Mrkt Swimmer,
I may be tempted to buy but would like to get some of your thoughts on this stock.
Here are some initial points on KAMN:
First, there is talk of a takeover possibility:
http://seekingalpha.com/article/41828
Second, the stock has held up very well in the massive correction so this is a very good sign of strong hands holding this stock.
Third, IBD gives KAMN an A overall(fundamentals a B-) , RS 96 (very strong). Aeropsace seems to be doing well as a sector (I thought) so not sure why IBD gives it a group fundamental of C+.
Fourth, financials look good:
BLOOMFIELD, Conn., Aug 02, 2007 /PRNewswire-FirstCall via COMTEX/ -- Kaman Corp. (KAMN) today reported financial results for the second quarter and six months ended June 29, 2007.
Net earnings for the second quarter of 2007 were $10.1 million, or $0.40 per share diluted, an increase of 34.4% for net earnings and 29.0% for earnings per share diluted over the $7.5 million, or $0.31 per share diluted, reported for the second quarter of 2006. The second quarter results for 2007 and 2006 include $2.4 million and $2.8 million respectively in additional pretax charges for the company's SH-2G(A) helicopter program for Australia. Net sales for the second quarter of 2007 were $320.0 million, an increase of 9.2% over the $293.0 million reported for the second quarter of 2006.
For the first half of 2007 the company reported net earnings of $20.1 million, or $0.81 per share diluted, an increase of 50.2% for net earnings and 47.3% for earnings per share diluted, compared to net earnings of $13.4 million, or $0.55 per share diluted, in the first half of 2006. The 2007 and 2006 first half results include $4.9 million and $5.3 million, respectively, in additional pretax charges for the Australia program. Net sales for the first half of 2007 were $637.3 million, an increase of 8.1% over the $589.6 million reported for the first half of 2006.
Paul R. Kuhn, chairman, president and chief executive officer, said: "Strong performance for the second quarter of 2007 was driven by solid programs and good market conditions across the four segments of our aerospace business with each showing sales and earnings growth. Higher sales volume from a growing business base and increased efficiencies contributed to the results. For the Industrial Distribution and Music segments, results reflect weaker market conditions, but also actions we have taken to build these businesses. Both segments are expected to perform well when conditions in their markets firm up and, for all of our segments, we are pleased with our prospects going forward."
Segment reports follow:
Aerostructures segment net sales for the second quarter of 2007 were $23.3 million, compared to $17.1 million for the second quarter of 2006. The continued ramp-up of certain segment programs drove the sales increase. Segment operating income was $3.7 million in the second quarter of 2007, compared to $2.0 million for the second quarter of 2006. Segment net sales for the first half of 2007 were $48.5 million, compared to $34.0 million for the first half of 2006. Segment operating income was $8.2 million in the first half of 2007, compared to $4.4 million for the first half of 2006.
Fuzing segment net sales for the second quarter of 2007 were $24.0 million, compared to $14.6 million in the second quarter of 2006. The increase was due primarily to a significant increase in shipments of the company's Joint Programmable Fuze product line. Segment operating income was $4.0 million for the second quarter of 2007, compared to $1.5 million in the second quarter of 2006. Segment net sales for the first half of 2007 were $42.5 million, compared to $33.7 million for the first half of 2006. Segment operating income was $6.6 million in the first half of 2007, compared to $4.4 million in the first half of 2006.
Helicopters segment net sales for the second quarter of 2007 were $19.0 million, compared to $15.2 million for the second quarter of 2006. The increase is the result of the company's ongoing maintenance and upgrade program for Egyptian SH-2G(E) aircraft, and the Sikorsky BLACK HAWK program involving fuselage joining, installations and other tasks. The segment had an operating loss of $0.2 million for the second quarter of 2007 (including a $2.4 million pretax charge for the Australia helicopter program) compared to an operating loss of $1.1 million (including a $2.8 million pretax charge for the Australia program) for the second quarter of 2006. Segment net sales for the first half of 2007 were $36.5 million, compared to $26.7 million in the first half of 2006. For the first half, the segment had an operating loss of $1.3 million (including $4.9 million in pretax charges for the Australia program), compared to an operating loss of $3.2 million (including $5.3 million pretax charges for the Australia program) for the first half of 2006.
Specialty Bearings segment net sales for the second quarter of 2007 were $31.5 million, compared to $27.5 million in the second quarter of 2006. The increase was due to increased shipments of the segment's airframe bearing products as the company continues to meet strong demand and add market share. During the quarter, the company completed its previously announced facilities expansion, providing necessary capacity to support further growth. Segment operating income was $10.2 million in the second quarter of 2007, compared to $8.3 million in the second quarter of 2006. Segment net sales for the first half of 2007 were $63.4 million, compared to $53.6 million for the first half of 2006. Segment operating income was $20.8 million for the first half of 2007, compared to $15.1 million for the first half of 2006.
Collectively, the Aerospace Segments' net sales for the second quarter of 2007 were $97.8 million, compared to $74.4 million for the second quarter of 2006. Total operating income for the Aerospace Segments was $17.7 million for the second quarter of 2007, compared to $10.7 million for the second quarter of 2006. First half net sales for the Aerospace Segments were $190.9 million for 2007, compared to $148.0 million in 2006. First half operating income was $34.3 million for 2007, compared to $20.7 million for the first half of 2006.
Industrial Distribution segment net sales for the second quarter of 2007 were $174.6 million, compared to $170.5 million in the second quarter of 2006. Segment operating income was $8.3 million in the second quarter of 2007, compared to $9.3 million in the second quarter of 2006. The segment's results for the second quarter reflect a weak economic climate for various industries, including the building materials industry, which was down sharply, automobile manufacturing, and original equipment manufacturing. This was somewhat offset by continued strength in other areas, including food processing, coal mining, oil exploration and electrical power generation. Results for the quarter also reflect the expenses associated with bringing new national account wins on line and increases in incremental operating costs. The new national accounts are expected to begin generating revenue over the next several quarters. Segment net sales for the first half of 2007 were $348.0 million, compared to $341.1 million in the first half of 2006. Segment operating income was $17.0 million in the first half of 2007, compared to $20.1 million in the first half of 2006.
Music segment net sales for the second quarter of 2007 were $47.6 million, compared to $48.1 in the second quarter of 2006. Segment operating income was $1.6 million for the second quarters of both 2007 and 2006. While results for this segment were affected by a combination of economic stresses within the age demographic of our end customers and typical seasonal softness, the segment was able to maintain profitability on slightly lower sales levels as a result of cost control measures implemented in mid-2006. The benefits realized from these measures was partially offset in both the second quarter and first half of 2007, however, by an increase in legal expenses associated primarily with document production in response to an inquiry by the Federal Trade Commission issued to participants throughout the music industry in general relative to minimum advertised pricing policies. Segment net sales for the first half of 2007 were $98.4 million, compared to $100.5 million for the first half of 2006. Segment operating income was $3.2 million in the first half of 2007, compared to $2.9 million for the first half of 2006.
A conference call to discuss this report has been scheduled for tomorrow, August 3, 2007 at 11:00 AM EDT. Listeners may access the call live over the Internet through a link on the home page of the company's website at http://www.kaman.com. In its discussion, management will include certain non- GAAP measures related to company performance. A reconciliation of this information to GAAP will be provided in the exhibits to the conference call and will be available through the Internet link provided above. Please see the MD&A section of the company's SEC Form 10-Q filed concurrent with the issuance of this release for greater detail on the quarter's financial results and various company programs.
Forward-Looking Statements
This release may contain forward-looking information relating to the company's business and prospects, including the Aerospace, Industrial Distribution and Music businesses, operating cash flow, and other matters that involve a number of uncertainties that may cause actual results to differ materially from expectations. Those uncertainties include, but are not limited to: 1) the successful conclusion of competitions for government programs and thereafter contract negotiations with government authorities, both foreign and domestic; 2) political conditions in countries where the company does or intends to do business; 3) standard government contract provisions permitting renegotiation of terms and termination for the convenience of the government; 4) domestic and foreign economic and competitive conditions in markets served by the company, particularly defense, commercial aviation, industrial production and the consumer market for music products; 5) risks associated with successful implementation and ramp up of significant new programs 6) satisfactory completion of the Australian SH-2G(A) program, including negotiation of payment and performance terms for the balance of the program as well as the additional work scope that would assist the Commonwealth in achieving certification of the aircraft in Australia; 7) receipt and successful execution of production orders for the JPF U.S. government contract including the exercise of all contract options and receipt of orders from allied militaries, as both have been assumed in connection with goodwill impairment evaluations; 8) in the EODC/University of Arizona litigation, successful defeat of the University's appeal of the jury verdict in the company's favor; 9) satisfactory resolution of (i) the company's dispute with the U.S. Army procurement agency relating to warranty work for the FMU-143 program and (ii) the 2005 DCIS investigation of that program; 10) satisfactory results of negotiations with NAVAIR concerning purchase of the company's leased facility in Bloomfield, Conn.; 11) continued support of the existing K- MAX helicopter fleet, including sale of existing K-MAX spare parts inventory and in 2007, availability of a redesigned clutch assembly system; 12) cost growth in connection with environmental remediation activities at the Moosup facility and such potential activities at the Bloomfield facility; 13) profitable integration of acquired businesses into the company's operations; 14) changes in supplier sales or vendor incentive policies; 15) the effect of price increases or decreases; 16) pension plan assumptions and future contributions; 17) future levels of indebtedness and capital expenditures; 18) continued availability of raw materials in adequate supplies; 19) the effects of currency exchange rates and foreign competition on future operations; 20) changes in laws and regulations, taxes, interest rates, inflation rates, general business conditions and other factors; and 21) other risks and uncertainties set forth in the company's annual, quarterly and current reports, and proxy statements. Any forward-looking information provided in this report should be considered with these factors in mind. The company assumes no obligation to update any forward-looking statements contained in this release.
A summary of segment information follows:
Summary of Segment Information
For the Three For the Six
Months Ended Months Ended
June 29, June 30, June 29, June 30,
(in millions) 2007 2006 2007 2006
Net sales:
Aerostructures $23.3 $17.1 $48.5 $34.0
Fuzing 24.0 14.6 42.5 33.7
Helicopters 19.0 15.2 36.5 26.7
Specialty Bearings 31.5 27.5 63.4 53.6
Subtotal Aerospace Segments 97.8 74.4 190.9 148.0
Industrial Distribution 174.6 170.5 348.0 341.1
Music 47.6 48.1 98.4 100.5
$320.0 $293.0 $637.3 $589.6
Operating income:
Aerostructures 3.7 2.0 8.2 4.4
Fuzing 4.0 1.5 6.6 4.4
Helicopters (0.2) (1.1) (1.3) (3.2)
Specialty Bearings 10.2 8.3 20.8 15.1
Subtotal Aerospace Segments 17.7 10.7 34.3 20.7
Industrial Distribution 8.3 9.3 17.0 20.1
Music 1.6 1.6 3.2 2.9
Net gain (loss) on sale of assets - - - 0.1
Corporate expense (1) (10.1) (7.6) (19.5) (18.1)
Operating income: 17.5 14.0 35.0 25.7
Interest expense, net (1.6) (1.6) (3.2) (2.9)
Other expense, net (0.3) (0.3) (0.2) (0.6)
Earnings before income taxes $15.6 $12.1 $31.6 $22.2
(1) "Corporate expense" increased for the quarter and six months ended June
29, 2007 compared to the same periods of 2006, as shown below:
For the Three For the Six
Months Ended Months Ended
June 29, June 30, June 29, June 30,
2007 2006 2007 2006
Corporate expenses before breakout
items $(7.0) $(6.4) $(13.3) $(13.8)
Breakout items:
Stock appreciation rights (0.8) 0.8 (1.0) (0.5)
Pension expense (0.1) (1.0) (0.2) (1.7)
Supplemental employees' retirement
plan (1.5) (1.4) (3.0) (2.7)
Group insurance (0.7) (0.1) (2.0) 0.1
Legal - recapitalization - 0.5 - 0.5
Corporate expense - total $(10.1) $(7.6) $(19.5) $(18.1)
KAMAN CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(In thousands except per share amounts)
For the For the
Three Months Ended Six Months Ended
June 29, June 30, June 29, June 30,
2007 2006 2007 2006
Net sales $319,953 $292,967 $637,271 $589,604
Costs and expenses:
Cost of sales 231,774 212,462 459,963 427,754
Selling, general and
administrative expense 71,472 67,008 143,571 137,082
Net (gain) loss on sale of
assets (56) (43) (14) (56)
Other operating income (724) (452) (1,256) (823)
Interest expense, net 1,625 1,630 3,143 2,888
Other expense (income), net 260 303 218 563
304,351 280,908 605,625 567,408
Earnings before income taxes 15,602 12,059 31,646 22,196
Income tax expense (5,543) (4,573) (11,512) (8,790)
Net earnings $10,059 $7,486 $20,134 $13,406
Net earnings per share:
Basic $0.41 $0.31 $0.83 $0.56
Diluted $0.40 $0.31 $0.81 $0.55
Average shares outstanding:
Basic 24,285 24,031 24,213 23,984
Diluted 25,210 24,880 25,157 24,883
Dividends declared per share $0.125 $0.125 $0.25 $0.25
KAMAN CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)
June 29, December 31,
2007 2006
Assets
Current assets:
Cash and cash equivalents $12,902 $12,720
Accounts receivable, net 216,684 189,328
Inventories 241,563 231,350
Income taxes receivable 2,056 -
Deferred income taxes 28,722 25,425
Other current assets 18,691 19,097
Total current assets 520,618 477,920
Property, plant and equipment, net 55,303 54,165
Goodwill 58,095 56,833
Other intangible assets, net 19,108 19,264
Deferred income taxes 15,417 14,000
Other, net 9,964 8,231
$678,505 $630,413
Liabilities and shareholders' equity
Current liabilities:
Notes payable $442 $-
Current portion of long-term debt 523 1,551
Accounts payable - trade 98,253 95,059
Accrued salaries and wages 22,634 26,129
Accrued pension costs 8,725 2,965
Accrued contract losses 11,477 11,542
Advances on contracts 9,964 10,215
Other accruals and payables 39,619 42,661
Income taxes payable - 8,215
Total current liabilities 191,637 198,337
Long-term debt, excluding current portion 107,135 72,872
Other long-term liabilities 61,199 62,643
Shareholders' equity 318,534 296,561
$678,505 $630,413
SOURCE Kaman Corp.
Mrkt Swimmer, could you perhaps go through this post below on Stockbee and see how KAMN fits into the IBD buy model? I am not great at calculating yr over yr growth etc so if you could do this I would appreciate it (specifically is KAMN
three-year earnings growth average no less than 20%?).
I want to see if KAMN fits the buying criteria of this article below (thanks):
Search For Stocks With Fattest Profit Growth
Today Investor's Business Daily has a piece on stock selection and importance of earnings and earnings acceleration in stock selection process.
What determines the value of a stock? Earnings, quarterly and annually. Current results and profit expected a year from now. These are the driving forces behind a stock.
True, the CAN SLIM model tells us to look for a recognizable base pattern, and to gauge volume against price action, and to track how many high-quality funds own the stock.
Watch that 10-week moving average. Are there too many stock splits? What is so special about Baidu's (BIDU) product that would make its stock fly?
But the bottom line is the bottom line.
Here's what you want to see in a company's profit record. Quarterly earnings gains of at least 25% over its year-earlier comparison. The higher the better. You don't want to see any profit shrinkage in recent quarters.
Slightly below-par results may be acceptable if they're moving in the right direction. For instance, a 20% gain in quarterly earnings doesn't look so hot.
But if it comes after a string of results that look like 3%, 8% and 15%, then the company is accelerating its earnings growth. If earnings growth is moving in the right direction, often the stock's price will follow.
Ideally, you want both fat numbers and acceleration. But be warned, that's a tall order.
Now look at annual earnings. The most recent full-year profit also should be at least 25% higher than the previous year. The three-year earnings growth average should come in at no less than 20%.
Which direction are the annual profit growth rates going? Just like the quarterly results, you want to see improvement from year to year. Any significant year-to-year earnings decline would be a big problem for a stock.
Too often, a stock that looks like a leader shows a big flaw in its annual profit growth.
Such a stock still could have great quarterly numbers, but one can easily end up buying a high-profile winner just as it's cooling off. Keep that big picture in mind.
Market corrections like the one we are currently witnessing are good time to focus on such stocks. These stocks withstand such corrections. Even if they pullback, they do it reluctantly. Most of the chart patterns which IBD talks about form during such market correction. When the weight of the market correction is lifted from such stocks, they just bolt out.
http://managementaschangeagent.blogspot.com/2007/08/good-succession-planning-kaman.html
Seems they found a very qualified replacement president and ceo so another big positive.
Any comment on the VERY high price to cash flow ratio for KAMN? I found this on morningstar:
http://quicktake.morningstar.com/StockNet/Diagnostics.aspx?Country=USA&Symbol=KAMN&stocktab=interpret
Mike,
You have don't a lot of research on KAMN, I agree with you the company seems on solid footing, the growth is good. One additional piece of information, the stock is owned heavily by the institution. Usually it is a good thing, but when market is not good, it tends to have excessive selling. If you decide to buy, put a stop loss on it.
Thanks,
mkt swimmer
5-Year earning growth = 19.9%
mrkt swimmer
my guess is best to buy nothing for the time being as we could still go much lower. i already bought two stocks with strong fundamentals 2 weeks ago and lost nicely on both thinking i was buying cheap (now they are even cheaper). this could even be the start of a crash for all we know...
I have not arguement with that buddy.
MktSwmr
http://biz.yahoo.com/seekingalpha/070622/39129_id.html?.v=1
been buying sdth recently
china chem play but it only trades on nasdaq (means not on shaghai bubble exchange).
very good fundamentals
sells only into northern china so not affected by US economy and subprime woes
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