Stock of the Week

FOLLOWING THE STRENGTH

2006-06-14T08:31:00.000-07:00

Today we decided to cut our losses on ACAT. Arctic Cat, based in Thief River Falls, Minnesota, designs, engineers, manufactures and markets snowmobiles and ATVs along with related parts and accessories. We've held onto the stock for 6 months as it produced negative returns in the Stock of the Week portfolio. Although first quarter sales were up, ACAT has replaced last years 5% sales growth with expected losses. Proceeds from the sale were reinvested in Dell, the world's largest personal computer maker, know for high quality products with an attractive price point for the consumer.
Dellhas tripled its employment projections and landed service contracts with some major market players.
Dell is expected to offer a new desktop PC using a microprocessor from Advanced Micro Devices. We repsect Dell's manufacturing and conrol cost expertise as core strengths that will help this computer manufacturer be a long term growth stock with some hefty profits. Check it out and let us know what you think!

TOP DOGS

2006-05-31T11:14:00.000-07:00

OUR STOCK OF THE WEEK HAS SEVERAL TOP DOGS POURING ON THE GRAVY IN OUR STOCK OF THE WEEK PORTFOLIO---
34% of our SOW portfolio is returning 20%+ or better
22% Returning 45% +or better
6%, returning 150% + or more
3% returning 200%+

A FEW HIGHLIGHTS!

Zones, (ZONS) 69.62% a single-source direct marketing reseller of name-brand information technology products, today announced its results Net income per share increased 50.0% Online sales increased 164.9% and represented 31.9% of net sales

We bought GME at 19.95 in March 2005 today is posted at $42.99 with a return of 53.88%. GME, retailer of video game products and personal computers (PC) entertainment software. We feel we’re right on track with this stock that reported record first quarter earnings.

(TOD) Todd Shipyard paid out a $4./share dividend. (TOD) is currently trading at $32.40 up 40.26% from original purchase price six months ago.

NAII, a formulator, manufacturer and marketer of customized nutritional supplements surged to a fresh 52-week high after its third-quarter profit more than doubled. The company's stock gained 23.20% percent, and was trading at a high of $10.38 earlier today (6/1/06)
Another great performer P.A.M. Transportation services reported a 78.5% increase in net income and a 92.3% increase in basic earnings for the first quarter of 2006.

Mac-Gray Corporation (TUC)provider of laundry facilities management services has returned 47% while AIRMthe largest air medical transportation company in the world showed a 30% profit over the first quarter of 2005 and increased in our portfolio 49% from it’s purchase price of $13.99 last November.
International Hotel Management the nation's largest independent hotel management company has earned us 43% profit.

Airline shares in CAL and AMR continue to be our top performers returning 210% and 177% respectively.

We've been riding the bull against media sentiment for over a year now. Stocks continue to out perform the S & P and the 10 year Treasury note We welcome your company on the Bull Ride.

Stocks Continue to beat Bonds!

2006-05-23T08:43:00.000-07:00

Current Value of the SOW Portfolio:

$194,676.78

Simple Return: 43.79%

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S & P 500 Value : $152,888.68
Simple Return:3.75%

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Treasury Bond Value : $135,903.99
Simple Return: -8.04%

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As we have been writing for the last two years, Individual Stocks are the place to be. Stocks continue to outperform equal investments in the S & P 500 and the Treasury Bond index. The numbers "SCREAM" for themselves.

Past performance does not guarantee future performance. We make no recommendations! But share out of our own personal interest.

SCREAMING RETURNS

2006-04-06T09:12:00.000-07:00

Current Value of the SOW Portfolio:

$205,536.32

Simple Return: 51.81%

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S & P 500 Value : $157,141.39
Simple Return:6.64%

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Treasury Bond Value : $138,647.57
Simple Return: -6.29%

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Past performance does not guarantee future performance. We make no recommendations! But share out of our own personal interest.

CONSTELLATION ENERGY

2006-04-06T08:07:00.000-07:00

Constellation Energy (CEG) is located in Baltimore. Their divisions include merchant energy and as of May 3, 1999, Baltimore Gas & Energy (BGE). Transforming (CEG) into the holding company for BGE and its affiliates and strengthened their ability to compete with energy companies across the nation.

The Group is now in a great position for its sector. It is a solid regional utility company in the Mid-Atlantic region and seem to have a highly valuable base-load power plant portfolio in PJM.

PJM handles the buying, selling and delivery of wholesale electricity through the Energy Market. In its role as a market operator, PJM balances the needs of suppliers, wholesale customers and other market participants and monitors market activities to ensure open, fair and equitable access to energy.

Most of (CEG) earnings come from competitive markets. The firm's low-cost nuclear and coal base-load facilities are concentrated in the desirable PJM power markets. The huge run up in U.S. gas and power prices has benefited these units substantially, and the company is ready to extend these benefits as its legacy fixed-price contracts roll off.

On 12/19/05 (CEG) announced they signed a definitive agreement with Florida Power & Light (FPL) which if approved will create the nation’s largest competitive energy supplier. The merger could create an energy company with a market capitalization of approximately $28 billion (based on current market values), with a combined annual revenues of $27 billion, and $57 billion in total assets.

A merger with (FPL) could help (CEG)'s growth while lowering its risk profile. If approved, this merger would create a premier East Coast utility with two big benefits: First, it solves the problem of (CEG)'sincreasingly unbalanced risk profile by adding (FPL's) regulated utility earnings to the mix, lowering merchant generation's contribution to earnings. It also creates new opportunities for (CEG) trading group by allowing it to use (FPL's) merchant portfolio as a platform to work around.

(CEG) financial health looks good. The company has used strong free cash flow to reduce its debt to 43% of total capital at the end of 2005. This merger with (FPL) could only improve (CEG) financial position.

They closed the market on Tuesday, April 4th @ $55.23. That is $7.37 or 11% off their 52 week high of $62.60 on 10/04/05. Their 52 week low was $49.58 on 3/29/05.

Investing in energy companies can be risky but Constellation might be one to look at. Can (CEG) control their “energy” and make you a profit?

20% OR BETTER

2006-04-04T08:54:00.000-07:00

Our most incredible producers have by far been our Airline investments (CAL) & (AMR), however, Many of our Stock of the Week investments for our Stocks or Bonds sitehave returned 20% or better. We update a few of these profitable picks:
(TFX), PAM Transportation (PTSI), Weider Nutrition International (WNI),
RTK, and (TOD).

34%
Todd Shipyards,(TOD) which has operated in the northwest since 1916,declared a 50% increase in dividends just last week.(TOD)Although we just purchased the stock in December, it has been one of our best performers with an ROI of 34%. One of the most attractive aspects of (TOD) is thier knowledge and history of and industry that is unpredictable. (TOD) has proven to be a leader in our portfolio.

26%

Teleflex Incorporated (TFX), designs and manufactures specialty engineered products.

TFX is made up of three very different business segments:

Teleflex Aerospace supports commercial and military aircraft;Teleflex Medical which supports health providers , and Teleflex Commercial

We purchased TFX in May of 2005. The stock has risen 26% trading today at $56.

23%
Rock-Tenn Company (RKT) is primarily a manufacturer of packaging, merchandising displays and paperboard. For the three months ended 31 December 2005, RTK revenues rose 27% . The investment we’ve owned since June 05 has returned a 23 % gain to our portfolio.

20%
PAM Transportation (PTSI) is a land carrier generating 99% of its revenues by operations conducted in the United States. Net income and earnings per share were up over 2004 with mechanics in place to reduce operating ratio and increase bottom line profitability.Putting an additional 20% revenue into our pocket PAM Transportation (PTSI) is nothing to sneeze at!

20%
Weider Nutrition International (WNI), debelops manufacturers and sells vitamins and nutritional supplements . Weider distributes its products to over 60,000 retail locations as Schiff International. Third quarter profits in 2006 doubled over 2004.

STOCKS OF THE WEEK KEEP SOARING

2006-03-20T11:47:00.000-08:00

Current Value of the SOW Portfolio:

$195,920.65

Simple Return: 49%

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S & P 500 Value : $152,787.37
Simple Return:6.57%

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Treasury Bond Value : $139,602.08
Simple Return: -3.02%

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As we have been writing for the last two years, Individual Stocks are the place to be. Stocks continue to outperform equal investments in the S & P 500 and the Treasury Bond index

Past performance does not guarantee future performance. We make no recommendations! But share out of our own personal interest.

STOCK OF THE WEEK: OIL DRI

2006-03-20T11:33:00.000-08:00

Oil-Dri (ODC) located in Chicago, develops, manufactures and markets sorbent products for use in a variety of applications. They(ODC) are the country’s largest manufacturer of kitty litter, which accounts for the majority of their revenue. They also operate four other divisions as well as owning a group of mines where they get the minerals used in their products:

Consumer Products consists primarily of cat litter and dog treats. They are the maker behind Jonny Cat and Cat’s Pride labels.
Specialty Products consists primarily of bleaching, filtration and clarification clays.
Crop Production and Horticultural Products include carriers for crop protection chemicals and fertilizers, drying agents, soil conditioners, sports field products, pellet binders for animal feeds.
Industrial and Automotive Products consists of oil, grease, clay & non-clay water sorbents.

On December 6, 2005, Oil-Dri reported a regular quarterly cash dividend of $0.12 per share of the Company's Common Stock. The dividend will be payable on March 17th to stockholders.

Then on February 22nd Oil-Dri announced record second quarter sales of $53mm for the three month period ending January 31st . Sales were 9% greater than sales of $49mm in the same quarter one year ago. Net income for the quarter was $1.8mm or $0.32 per share, compared with net income of $2mm or $0.36 per share in the second quarter one year ago.

Dan Jaffee, President and CEO stated, "We are quite pleased with our second quarter results as they reflect an improving trend in our overall business. Quarterly results demonstrate the company's progress in rebuilding our profit margins after the unprecedented increase in energy and other costs following hurricanes Katrina and Rita”.

Their business seems to be strong and showing growth in both existing and new accounts with margins improving over the previous quarter. Jaffee also reported that the company had been able to raise prices to help offset some of the energy cost increases, which have now leveled off but are nearly double since last year. Additional price increases are scheduled in the second half of the year.

Oil-Dri seems to be another casualty of hurricanes Katrina and Rita but is now on the rebound. They closed Tuesday, March 14th at a NEW 52 week high of $19.21. That is $.10 higher than their recent high 5 days ago, 3/10/06, @ $19.11. Their stock has been as low as $16.40 on 6/3/05.

Are you ready to make your portfolio purr? Oil-Dri may be one to absorb.

SOW PERFORMANCE REVIEW

2006-03-09T08:34:00.000-08:00

Current Value of the SOW Portfolio:

$181,705.09

Simple Return: 42.61%

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S & P 500 Value : $146,071.02
Simple Return:4.79%

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Treasury Bond Value : $164,732.40
Simple Return: -3.73%

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As we have been writing for the last two years, Individual Stocks are the place to be. Stocks continue to outperform equal investments in the S & P 500 and the Treasury Bond index

Past performance does not guarantee future performance. We make no recommendations! But share out of our own personal interest.

STOCK OF THE WEEK: NAII

2006-03-09T07:20:00.000-08:00

Natural Alternative International (NAII)
makes nutritional products and provides related services. Located in San Marcos, CA, the Company produces nutritional supplements in capsule, tablet, and powder forms. Founded in 1980, Natural Alternatives has operations in Southern California, Switzerland, and Japan.

Their complete partnership approach offers a wide range of innovative nutritional products and services to the client including: scientific research, clinical studies, proprietary ingredients, customer-specific nutritional product formulation, product testing and evaluation, marketing management and support, packaging and delivery system design, regulatory review and international product registration assistance.

On Feb. 14th Natural Alternatives
announced a second quarter net sales decrease of 8% to $19.9 mm from $21.5 mm for the comparable quarter last year. The reduction in net sales resulted mainly from a decrease in private label contract manufacturing sales. Also, an additional $3.8 mm of term debt was obtained on December 5th to fund part of the $5.6 mm of net cash used in the recent acquisition of Real Health Laboratories, Inc. (RHL).

According to company President, Randall Weaver"During the second quarter, we aggressively reduced costs in response to the net sales decline. We are pleased with our progress related to the integration of the RHL acquisition and do not expect a significant impact on profitability in the third quarter”.

Earlier this year the Company had announced receiving an initial purchase orders from two new contract manufacturing customers. These two new customers are expected to produce net sales in excess of $10 mm for the remainder of the ‘06 fiscal year.

Why does Weaver seem so positive on this news? Just 5 months before that the headlines read- Natural Alternatives
announces record breaking revenue for Fiscal 2005. For the fiscal year ending June 30, 2005, their revenue increased 16% to $91.5 million from $78.5 million in the prior year.

On March 8th they closed the day at $8.33. Are they headed back up to their 52 week high on March 1st of $8.65? On Oct. 26, 05 they were at $5.03. A 52 week low.

With talk about health savings and flex spending accounts to support supplements are you ready to invest in making your financial account healthier?

SOW: TOP PERFOMERS

2006-03-02T07:59:00.000-08:00

Investments in airlines have been our top perfomers returning 200% over purchase. With load factors and the price of airline tickets on the rise as well as the increase in international travel, we expect these to continue to rise. Other top performers in our Stock of the Week Portfolio

After the airlines, US Gypsum is our best performer. US Gypsum which manufactures and distributes building materials returned 4th quarter net sales up 14% in its secon consecutive year of record shipments. In our Stock of the Week Portfolio, we have increase 159% since purchase.

The next top performer in our portfolio is Zones. Netting 2 million during the 4th quarter, Zones closed 2005 with its 4th consecutive year of earnings growth. Zones is a direct seller of hardware, software and accessories. In the Stock of the Week Portfolio
Zones has given us a 79 % return.

AIRM Air Methods Corporation which provides air emergency transport services in 15 states, has given us growth of 78% and Jewette Cameron, which reported annual increases of 60%, has given us a 54% increase in our Stock of the Week Portfolio.

Check out these an other individual stocks to see if you want to add any of these to your personal stock portfolios.

Ride the Bull!

STOCK OF THE WEEK UPDATE

2006-03-02T07:58:00.000-08:00

Current Value of the SOW Portfolio:

$177,752.33

Simple Return: 45.89%

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S & P 500 Value : $142,858.27
Simple Return:5.52%

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Treasury Bond Value : $132,888.91
Simple Return: -2.25%

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As we have been writing for the last two years, Individual Stocks are the place to be. Stocks continue to outperform equal investments in the S & P 500 and the Treasury Bond index

Past performance does not guarantee future performance. We make no recommendations! But share out of our own personal interest.

STOCK OF THE WEEK: ROANOKE ELECTRIC STEEL

2006-03-02T06:20:00.000-08:00

Roanoke Electrick Steel(RESC) and its wholly-owned subsidiaries manufacture and market steel products from scrap metal primarily extracted from junked automobiles.

The Company’s subsidiary, Shredded Products Corp., extracts scrap iron and steel from junked automobiles. Two other subsidiaries, John W. Hancock Jr. Inc and Socar Inc., fabricate open-web steel joists for use in the construction of commercial and industrial buildings.

The main plant of Roanoke Electrick Steel , Steel of West Virginia Inc, runs a state-of-the-art steel mini-mill in Roanoke, VA. The mill converts scrap into billets that are rolled into Angles, Plain Rounds, Flats, Channels and Reinforcing Bars of various lengths and sizes. The Group's customers include steel service centers, fabricators and manufacturers of trucks, guardrail posts, housing, off-highway construction and mining equipment.

Located in Roanoke Virgina gives them fast, ready access to markets throughout the eastern US by train and truck. Over 2/3 of the U.S. population lives within a days drive time of Roanoke, and Roanoke Electric Steel presently serves customers in 21 states. Rail service is provided by the Norfolk Southern. For truck freight, their main plant is located just minutes from I81, with over 50 truck carriers serving the area.

On January 5th, Roanoke Electrick Steel stock rose $1.01 to $25. That was a 4% increase after the steel company reported 10% growth in 4th Qtr. earnings. The company's profit for the quarter ending Oct. 31st rose to $17.5 mm, or $1.55 a share, from $15.9 mm, or $1.44 a share, a year ago. Sales rose to $141 mm from $139.1 mm a year earlier.

On Wednesday, March 1st the stock closed on the Nasdaq @ $28.66. That is just $.39 off its 52 week high on Feb. 6th of $29.05. Their 52 week low came 7 months ago on July 7th of $14.96.

Oh did I mention that on Jan. 18th Roanoke Electrick Steel announced their 189th consecutive quarterly common stock cash dividend in the amount of 11 cents per share. They appear to be committed to providing the best product and service at the least cost to their customers by constantly reviewing and implementing new ways and means to improve their performance and competitive position. I think it is working.

Are you prepared to “steel” some profit on their performance?

SOW RETURNS KEEP RISING

2006-02-23T07:47:00.000-08:00

Current Value of the SOW Portfolio:

$174,242

Simple Return: 45.89%

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S & P 500 Value : $138,858
Simple Return:5.67%

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Treasury Bond Value : $130,775
Simple Return: -.89%

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As we have been writing for the last two years, Individual Stocks are the place to be. Stocks continue to outperform equal investments in the S & P 500 and the Treasury Bond index

Past performance does not guarantee future performance. We make no recommendations! But share out of our own personal interest.

STOCK OF THE WEEK: PAM

2006-02-23T07:19:00.000-08:00

PAM Transportation Services (PTSI) is a leading truckload dry van carrier transporting general goods throughout the Continental- US, as well as in the providences of Ontario and Quebec. The Company also provides transportation services in Mexico under agreements with Mexican carriers.

Their corporate office is located in Tontitown, AK. Within the five divisions of their company, PAM has approximately 1,800 trucks. The company has a consistent track record of profitability.

They are an irregular route, common carrier which means their trucks do not run on a regular route every day. Most of the freight they transport is known as dry freight (meaning non-refrigerated), general goods. It also means that they can transport virtually anything that people want to ship on a truck.

On February 8th, PAM announced very strong 4th Quarter; Year Ending December 31, 2005 results. Their net income increased $2.5mm or 146% from $1.8mm for the 4th quarter ending December 31st to $4.3mm for the quarter ending December 31, 2005. Earnings per share increased 156% year over year from $.16 to $.41 for the quarter ending December 31st.

As for year end, the Net income was $13.1mm and basic earnings per share of $1.20 compared to last year or $10.6mm and basic earnings per share of $.94.

Operating revenues excluding fuel surcharges for the year end, December 31st were $326.mm, a 5.5% increase compared to $309.mm last year.

Robert W. Weaver, President of the company) was encouraged by the results of their 4th quarter operations. Weaver said "Additionally we had success in raising our rates by 14% from an average rate of $1.18 per mile during the 4th quarter ending December 31, 2004 to an average rate of $1.35 during the quarter ending December 31, 2005. Although we are pleased with these results we know we still have work to do to reduce our operating ratio and to continue to increase our revenues and bottom line profitability. We believe that we have the mechanisms in place to achieve these initiatives".

PAM closed Feb. 22nd on the NASDAQ at $20.25 just $.25 off their 52 week high of $20.50 5 days ago (Feb. 17th). Their 52 week low came on June 17, 2005 @ $13.43.

The trucking business is a very competitive industry. The sharp increase in diesel fuel prices this past fall have many small truckers seeing their profits vanish. However, PAM was successful in a price increase and indications are they have what it takes to weather the tough economical times. Do you have what it takes to move with them?

45% RETURN--CHECK US OUT

2006-02-16T09:26:00.000-08:00

Current Value of the SOW Portfolio:

$167,433

Simple Return: 45.03%

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S & P 500 Value : $134,536
Simple Return:5.59%

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Treasury Bond Value : $125,260
Simple Return: -2.11%

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As we have been writing for the last two years, Individual Stocks are the place to be. Stocks continue to outperform equal investments in the S & P 500 and the Treasury Bond index Be sure to check out other Stock of the Week picks to see if any are right for you. We bought Air Methods (AIRM) in November at $13.99 and today it posted at $24.20--a 72% return in just 4 months. Another great performer for us beside the airline stocks have been US Gypsum (USG) up 160% since last April and (JCTFC) Jewett Cameron up 51% since last July

Past performance does not guarantee future performance. We make no recommendations! But share out of our own personal interest.

STOCK OF THE WEEK: BUNGE

2006-02-16T08:58:00.000-08:00

Bunge (BG) is a global agri-business and food company with operations that extend from the farm field to the retail store and encompasses the world. They make their profits by producing and selling fertilizer to farmers; buying, handling and selling oilseeds and grains; crushing oilseeds to make meal and oil for the livestock and food processing industries; and producing edible oils and related products for foodservice customers and consumers.

Bunge is also:
* The world's largest oilseed processor
* The world's largest seller of bottled vegetable oil to consumers and a leading supplier of premium edible oils to the U.S. foodservice industry
* The world's largest corn dry miller
* The largest manufacturer and seller of fertilizer and a leading supplier of animal feed in Brazil
* The largest exporter of soy products to Asia
* A leading bio-diesel producer

Processed soybeans are the largest source of animal feed and edible oils in the world. Global soybean consumption has increased 4.5% per year over the past 10 years and shows no signs of slowing. As people around the world eat healthier, Bunge is there to supply them with lots of healthy, great-tasting food made from the world’s most versatile and popular agricultural product.

The versatility of soy has put Bunge on the map. Soybean Oil is the most abundant and one of the least expensive vegetable oils in the world. It has a variety of functional benefits, and is a favorite among food processors, foodservice providers and restaurants. Its relatively high flash point, about 620°F, makes it ideal for cooking, and its emulsifying properties improve the texture and consistency of baked goods.

Soybean meal is an important component in animal feed. Its high protein content — between 44 and 49 percent — and amino acid profile make it an ideal supplement to the primary low-protein, high-energy feed fed to poultry, hogs, dairy cattle and farm-raised fish.

Bunge has joined forces with DuPont (DD) to produce a low-linoleic soybean oil that should meet the demand for reduced and zero trans fat products in the US and other parts of the world. However, new labeling requirements from the USDA require food processors to disclose levels of trans-fatty acids in their products. Bunge could see sales of edible oils falter in 2006 as the rules take effect.

With over 80% of the world's soybean crop grown in the Americas, and the largest demand coming from Europe and Asia, Bunge has positioned itself to be a low-cost provider in the industry.

Bunge is South America's top producer of fertilizer and is the only supplier with vertically integrated operations. In places like Brazil, where the soil is inherently deficient in key nutrients, farmers are forced to purchase fertilizer to realize profitable crop yields. Controlling five of the six main phosphate mines in Brazil gives Bunge a significant leg up on competitors, who are forced to import this key fertilizer ingredient. While the fertilizer division accounts for just 10% of Bunge's annual sales, it generates close to 40% of its profits.

4th quarter results are in with sales up 8% @ $6.7 billion and net income up 42% @ 149 million over same period last year. They closed on February 14th at $56.85. This is up over $1.00 from yesterday’s close. Their 52 week high came on July 19, 05 @ $67.99. Their 52 week low came on Oct. 27th @ $46.65.

Their Chairman & CEO Alberto Weisser, said: "In 2005, our principal problems stemmed from a weak operating environment in Brazil. Farm economics deteriorated due to a drought, lower soybean prices and a steadily appreciating Brazilian real estate. Farmers reacted by withholding crop sales and delaying purchases of farm inputs. The real estate appreciation affected Bunge directly, primarily by raising local costs and squeezing margins. Fertilizer inventory purchased earlier in the year was sold later at a stronger real-U.S. dollar exchange rate, pressuring dollar margins”.

"In 2006 we will stay focused on growth and efficiency. This year we intend to create a stronger link to customers in China by purchasing a second soybean crushing and refining plant in that country. We will bring two new crushing plants in Spain, replacing less efficient assets” reported Weisser.

They also plan to open a new Russian plant by the end of 2006. They expect it to supply their domestic bottled oil business with much better profit margins.

All indications are that Bunge's business fundamentals are strong. The agricultural market does experience fluctuations just like every other business. Can you and Bunge benefit from the goodness of Soybeans and its many by products??

SOW: OUTSHINES OTHER INVESTMENTS

2006-01-31T11:18:00.000-08:00

Current Value of the SOW Portfolio:

$157,433.28

Simple Return: 39.23%

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S & P 500 Value : $130,309.23
Simple Return:5.59%

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Treasury Bond Value : $121,786
Simple Return: 1.75%

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As we have been writing for the last two years, Individual Stocks are the place to be. Stocks continue to outperform equal investments in the S & P 500 and the TLT Treasury Bond index Be sure to check out other Stock of the Week picks to see if its right for you.

Past performance does not guarantee future performance. We make no recommendations! But share out of interest.

STOCK OF THE WEEK: MYERS INDUSTRIES

2006-01-31T10:46:00.000-08:00

Myers Industries,Inc is an international manufacturer of polymer products for agricultural, automotive, consumer, and industrial markets. The company also manufacturers various types of rubber products used for automotive parts and construction equipment.

They are located in Akron, OH- trading on the NYSE under MYE and closed January 30th @ $15.08. They had an impressive run in January with their 52 week High of $15.50 coming on Jan 20, 06. Their 52 week Low came on April 28, 05 @ $9.23.
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Myers Industries,Inc has a long history of innovation and achievement. The growth and value of their business is driven by brand strength and market leadership, product innovation, broad capabilities, and other fundamentals that help them contribute to their customers' success.

A Myers product may touch your life each day.

• North America's dominant manufacturer of plastic flower planters, flats, trays and baskets.
• Manufactures the most comprehensive range of rubber tire repair and retread products in the U.S.
• The leading U.S. wholesale distributor of tools, equipment, and supplies for tire, wheel, and under vehicle service.
• 31 Manufacturing facilities in six countries.
• 39 domestic and five international Distribution branches
• More than 5,300 employees

On November 1, 05, Myers announced record net sales of $211 million for their 3rd QTR ending Sept. 30, 2005, the highest 3rd QTR revenues in the Company’s history, and a 6% increase over last year’s 3rd QTR sales of $199 million.

Net income of $4.9 million was also the highest for any 3rd QTR in the Company’s history, delivering an increase of 29% from $3.8 million last year which included a net gain of $.9 million from the sale of a warehouse facility. Net income per share was $.14, an increase of 27% compared with $.11 in the 3rd QTR of 2004.

The year over year improvement in earnings for the 3rd QTR of 2005 reflects the impact of increased selling prices, higher sales volumes, favorable product mix, greater utilization of manufacturing capacity, and additional benefits from ongoing cost control initiatives. These positive factors offset the higher costs for plastic raw materials, which were approximately 10% higher on average.

Usually the 3rd QTR has been the weakest for Myers but Management says the strong performance this year reflects continued increases in selling prices across their product lines, improved sales volumes in most segments, as well as effective cost control measures and strategic purchasing of plastic raw materials to help mitigate the impact of higher raw material costs.

As the 4th QTR approaches, management anticipates the unprecedented cycle of raw material price increases which were already on the rise in August and could impact the Company’s earnings performance. With the impact of Hurricane Katrina brought a new round of price increases due to damage to the resin producers’ Gulf Coast facilities, which was further exacerbated by Hurricane Rita.

The Company intends to continue its combination of cost reduction activities and product price increases to mitigate the short-term effects of the higher operating cost environment, but remains cautious about the limited visibility as to when this situation will lessen.

Will the higher plastic prices give Myers a flat or will they continue rolling along to continue record financial performance?

CHECK OUT THE STOCK MARKET

2006-01-20T06:14:00.000-08:00

Current Value of the SOW Portfolio:

$145,833.82

Simple Return: 32.95%

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S & P 500 Value : $126,630.75
Simple Return: 6..04%

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Treasury Bond Value : $119,842.81
Simple Return: -.09%

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As we have been writing for the last two years, Individual Stocks are the place to be. Stocks continue to outperform equal investments in the S & P 500 (6.04%)and the TLT Treasury Bond index which has just begun to be in the positive column with -.09% growth . . This week, Kupsky has been researching Artic Cat to add to our portfolio. Be sure to check out other Stock of the Week picks to see if its right for you.

Past performance does not guarantee future performance. We make no recommendations!

Please call or write if you have questions about how to make money in stocks, bonds and real estate. You can reach me during office hours at 336-778-0543 or write me

STOCK OF THE WEEK UPDATE

2006-01-20T06:09:00.000-08:00

This week Kupsky has been researching Artic Cat , the leading supplier of snomobile products in the US to add to our Stock of the Week portfolio. Overall, our individual stock picks are returning 33% and have been outperforming equal investments in the S & P (6.04%) and the 10 year Treasury Note at -.09%.
See more at Stock of the Week.

If you have a particular stock you'd like to talk about call me ( 336-778-0543), or send an email

SOW PERFORMANCE SOARS

2006-01-10T11:28:00.000-08:00

This week Kupsky has been researching U.S. Concrete , the leading supplier of ready-mixed concrete and concrete products in the US to add to our Stock of the Week portfolio. Overall, our individual stock picks are returning 36.81% and have been outperforming equal investments in the S & P (3.10%) and the 10 year Treasury Note at 1.08%. Other than airline stock investment in AMR and CAL; GME (53%) and USG (103%)have been particularly high yields for this portfolio.

See more at Stock of the Week.

If you have a particular stock you'd like to talk about call me ( 336-778-0543), or send an email

2006-01-10T11:03:00.000-08:00

Current Value of the SOW Portfolio:

$143,67.27

Simple Return: 36.81%

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S & P 500 Value : $127,690.28
Simple Return: 6.93%

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Treasury Bond Value : $114,699.04
Simple Return: 1.08%

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As we have been writing for the last two years, Individual Stocks are the place to be. Stocks continue to outperform equal investments in the S & P 500 (6.93%)and the TLT Treasury Bond index which has just begun to be in the positive column with 1.08% growth . . This week, Kupsky has been researching US Concrete to add to our portfolio. Be sure to check out other Stock of the Week picks to see if they are right for you.

Past performance does not guarantee future performance. We make no recommendations!

Please call or write if you have questions about how to make money in stocks, bonds and real estate. You can reach me during office hours at 336-778-0543 or write me

CONCRETE FOR YOUR PORTFOLIO

2006-01-10T07:21:00.000-08:00

U.S. Concrete produces ready-mixed concrete and related products and services to the construction industry. Working with contractors, developers, and home builders who’s focus is beyond the price of ready-mixed concrete to product quality, consistency and reduction of in-place concrete costs.

U.S. Concrete's goal is to be the leading supplier of ready-mixed concrete and concrete products in the US. They have established operations in 11 states and in DC consisting of 88 fixed and seven portable ready-mixed concrete plants, eight pre-cast concrete plants, three concrete block plants and one quarry.

They believe growth opportunities for a company with a national strategy and planned acquisition programs are the future success for U.S. Concrete. As a result of this focus, the company believes it is well positioned to participate in an improving economic cycle.

Third Quarter results were reported on November 7th with net income of $9.0 million, or $0.31 per diluted share, for the quarter ending September 30, 2005, up $1.0 million, or $0.03 per diluted share over the third quarter of 2004 results.

Third quarter 2005 revenues increased 16.2% to $172.3 million compared to $148.3 million in the prior year, reflecting higher ready-mixed concrete prices and sales volumes and increased other concrete-related product sales.

U.S. Concrete's average sales price per cubic yard of ready-mixed concrete during the first nine months of 2005 was approximately 12.0% higher than the first nine months of 2004. During 2005, the Company implemented price increases in all of its major markets and announced additional price increases for ready-mixed concrete in most of its markets, to be effective January 1, 2006.

U.S. Concrete; RMIX closed on the NASDAQ January 7th @ $10.03. Just a few cents off its 52-week high (1/6/06) @ $10.05. Their stock has been as low as $ 5.07 on (3/3/05).

U.S. Concrete's is striving to become a different kind of concrete company, providing their customers great service and value by manufacturing the highest quality products. By fortifying their balance sheet with an early debt retirement in 2004, could be a concrete foundation for your portfolio in 2006?

TAKE A CAT BY THE TAIL

2006-01-10T07:20:00.000-08:00

STOCK OF THE WEEK: ARTIC CAT
Arctic Cat, based in Thief River Falls, Minnesota, designs, engineers, manufactures and markets snowmobiles and ATVs along with related parts and accessories.

The Company sells its products through a group of independent dealers located throughout the US and Canada, and through distributors in Alaska, Europe, the Middle East, Asia and other international markets.

The Arctic Cat, brand has been around for more than 30 years and is among the most widely recognized and respected names in the snowmobile industry. The Company trades on the NASDAQ Stock Market under the symbol (ACAT).

It closed on January 6th at $22.62 up $4.69 from its 52 week low on 10/12/05 of $17.93. Their 52 week high came on 3/2/05 @ $29.20

First-Quarter Highlights:
Across the board Sales rose 5%
Earnings per diluted share of $0.02
Sales increase across all product lines

They reported net sales of $107.9 million for the fiscal 2006 first quarter ending June 30, 2005, up 5% versus $102.6 million in the same period last year.

Net earnings for the quarter rose to $448,000, or $0.02 per diluted share, compared to net earnings of $124,000, or $0.01 per diluted share, in the prior-year period.

Christopher A. Tworney, Chairman and CEO said "We are pleased to report another record first quarter. Sales increased across all product lines and exceeded our expectations, due to slightly higher than anticipated sales to dealers."

ATV sales increased 6 percent to $41.4 million in the first quarter of last year. Dealers responded positively to their 2006 model ATVs unveiled at their dealer show in June. They showed further progress on their ATV growth strategy to extend their products into every market segment and to offer best-in-class ATVs at competitive prices.

Among the new 2006 ATVs recently introduced was Arctic Cat's first entry into the true utility category with the Prowler. The Prowler's special features include side-by-side bucket seats with seat belts, and a rear-cargo box designed for hauling and dumping.

Sales of snowmobiles rose 3% to $520 million. Parts and accessory sales increased 14% to $14.5 million fueled by sales across all product lines.

The outlook for Arctic Catcontinues to out smart the analysts. Over the last few quarters, they have missed judged the stock. The company is predicting for fiscal 2006 they will have net sales growth of 5% to $723 million. However, the company is anticipating lower margins due to increased raw material costs.

During the 2006 first quarter, Arctic Catrepurchased approximately 185,000 shares of its common stock and during its fiscal 2006 second quarter, they repurchased 401,500 shares of its common stock as part of its $20 million share repurchase program.

To improve upon lower margins in the future, aggressive plans have been announced to reduce costs and enhance the company's operational efficiency by next fiscal year. A new state-of-the-art facility is being built in St. Cloud. This plant should enhance competitiveness by increasing manufacturing efficiency and reducing ATV engine costs. It will also provide greater flexibility and control over the ATVs they produce to better meet changing customer needs.

Arctic Catcontinues to deliver good news to its shareholders. Take the cat by the tail and hold on for the ride?

INCREDIBLE RETURNS

2006-01-09T10:24:00.000-08:00

We continue to update you on Airlines as a stock investment
Because our returns have more than doubled since the purchase price, however, there are a few other stocks in our Stock of the Week portfolio which have proved to beat the market with incredible returns:

United States Gypsum Company (NYSE: USG), a leader in building products has returned 103%. We purchased USG on April 7, 2005 at $33.32 and USG was posting a $67.68 price today.
(NYSE: USG) is credited with creating North America's building materials industry. Their products are used in everything from major commercial developments and residential housing to simple home improvement projects. Their flagship brands include SHEETROCK® Brand gypsum panels and DUROCK® Brand cement board, which are recognized around the world.

Another stock in the Stock of the Week that is performing well above expectations is Gamestop is approaching a ROI of 52%. We purchased on 3/13/05 at $19.95 per share and today GME
Price was listed at $38.37. Gamestop is the nation's largest video game and entertainment software specialty retailer. selling the most popular new and used software, hardware and game accessories for PC and video game.

The Bull is on the Move---It's never too late to jump on and Ride!

WE'RE RIDING THE BULL

2005-12-01T07:02:00.000-08:00

Current Value of the SOW Portfolio:

$124,956.67

Simple Return: 23.60%

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S & P 500 Value : $120,844.62
Simple Return: 4.69%

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Treasury Bond Value : $108,721.54
Simple Return: -2.89%

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As we have been writing for the last two years, Individual Stocks are the place to be. Stocks continue to outperform equal investments in the S & P 500 (4.69%)and the TLT Treasury Bond index (-2.89%). The Treasury Bond actually dropped another point from -1.69 to -2.89. It's never too late to jump on board. This week, Kupsky has been researching Todd Shipyard as our Stocks of the Week. Be sure to check out other Stocks of the Week to see if it's a pick to include in your portfolio.

Past performance does not guarantee future performance. We make no recommendations!

Please call or write if you have questions about how to make money in stocks, bonds and real estate. You can reach me during office hours at 336-778-0543 or write me

STOCK OF THE WEEK: TODD SHIPYARDS

2005-12-01T06:40:00.000-08:00

Todd Shipyard is in the business to do routine/emergency repairs, overhaul, conversions, and construction of military and commercial ships. Its customers include the U.S. Government, the Department of the Navy, the Coast Guard, the Washington State Ferry System, and other commercial customers, such as fishing fleets, cargo shippers, tug and barge operators, and cruise lines. Founded in 1916 and headquartered in Seattle, WA. Todd trades on the NYSE, under (TOD).

The company operates shipyards and dry dock facilities in two locations in the Pacific Northwest- Seattle and Puget Sound Naval Shipyard in Bremerton, WA.

Since 2001, under the direction of Steve Welch, CEO the ongoing focus of Todd is achieving to be the Best Shipyard on the West Coast of North America. They want customers to choose Todd because of their commitment to improve safety, quality, and running a lean manufacturing company where the focus is on moving crews and equipment on and off ships more efficiently.

Like most other U.S.-based shipyards, Toddrelies heavily on government contracts. More than half of Todd’s business comes from government contracts to repair and maintain Navy Ships, including work on Washington ferries. So in December ‘04 when the Navy scaled back planned repair work on some of their ships they were barely able to maintain their bottom line.

However, that same month the Coast Guard awarded Todd a contract to maintain some of their ships. Then in April ‘05, the company announced it had landed a contract to repair and maintain four aircraft carriers based in the Puget Sound. The contract could run for five years with a value of $133 million if all the options are exercised.

On Nov. 7th, Todd announced financial results for the second quarter ending October 2, 2005, the Company reported net income of $4.4 million on revenue of $70.8 million. For the six month period then ended, the Company reported net income of $6.9 million on revenue of $137.6 million. For the prior year second quarter ending October 3, 2004, the Company reported net income of $2.4 million on revenue of $36.6 million. For the six month period then ended, the Company reported income of $3.7 million revenue of $68.7 million.

The Company's second quarter revenue of $70.8 million reflects an increase of $34.1 million (93%) from the same period last fiscal year. Revenues for the first six months of fiscal year 2006 of $137.6 million reflect an increase of $68.9 million (100%) from fiscal year 2005 comparable periods.

Todd knows competition is stiff and the customer workload is unpredictable so they are positioning themselves to respond quickly to customer demands and squeeze as much income as they can from the money they take in.

They went from a 52 week low on Feb 10th of $16.51 to a 52 week high of $23.00 on Nov. 28th. Closing on Tuesday, Nov. 29th @ $ 23.29. Another 52 week high! Todd is sailing along. Are you ready to jump on board and experience the smooth sailing of this company?

THE BULL KEEPS RUNNING

2005-11-22T08:20:00.000-08:00

Current Value of the SOW Portfolio:

$121,785.89

Simple Return: 25.42%

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S & P 500 Value : $116,490.10
Simple Return: 4.54%

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Treasury Bond Value : $105,838.54
Simple Return: -1.96%

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As we have been writing for the last two years, Individual Stocks are the place to be. Stocks continue to outperform equal investments in the S & P 500 (4.54%)and the TLT Treasury Bond index (-1.96%). This week, Kupsky has been researching Air Methods, a leader in air medical emergency transportation services and systems throughout the U.S., as our Stocks of the Week. Be sure to check out other Stocks of the Week to see if it's a pick to include in your portfolio.

Past performance does not guarantee future performance. We make no recommendations!

Please call or write if you have questions about how to make money in stocks, bonds and real estate. You can reach me during office hours at 336-778-0543 or write me

STOCK OF THE WEEK: AIR METHODS

2005-11-22T07:35:00.000-08:00

Air Methods Corporation is a leader in air medical emergency transportation services and systems throughout the U.S. It transports persons requiring intensive medical care from either the scene of an accident or general care hospitals to highly skilled trauma centers. The company operates three (3) divisions:

* Air Medical Services (Hospital Based Air Medical Transport), based in Denver provides emergency air medical transportation services to hospitals located in 26 states and Puerto Rico. The division ownes, leases and maintains a fleet of approximately 180 helicopters and fixed wing aircraft.

* Mercy Air Services (Community Based Air Medical Transport) based in Los Angeles provides air medical transportation services to 17 states. Their services include operation and maintenance of the helicopters, fixed-wing aircraft, medical care, dispatch and communications, as well as medical billing and collection.

* Products Division, based in Denver, designs, manufactures, installs, and certifies aircraft medical interiors and other aerospace products for domestic and international customers. The division maintains a diverse portfolio products including the Black Hawk Multi-Mission Medevac System, and the Spinal Cord Injury Transport System (developed for the U.S. Air Force).

When third quarter results came in November 9th, Air Methods was flying high. The company earned $0.50 of Basic EPS and revenue increases 31% to $90.5 million from $68.9 million in the year-ago quarter. For the nine-month period, revenue increased 20% to $246.7 million, up from $204.8 million in the prior-year nine-month period.

Division Highlights:

Community-Based Operations revenue increased 42% to $61.8 million, and segment net income increased nearly two-fold to $7.7 million during the third quarter, as compared with $2.7 million in the prior-year quarter.

Hospital-Based Operations revenue increased by 12% to $26.3 million and segment net income increased over 2.4 times to $3.1 million during the third quarter as compared with $0.9 million in the prior-year quarter.

Products Division revenue, including revenue generated from internal projects, increased 7% to $3.9 million, while segment net income decreased by 37% to $0.8 million during the third quarter as compared with the prior-year quarter. Segment net income did not increase in proportion to revenue growth due to changes in product mix which reduced the overall margin percentage.

Aaron Todd, CEO, stated, "We are pleased that our third quarter financial results reflect a continuation of the strong performance experienced during the second quarter of this year. We are also happy to report that our fourth quarter has begun with healthy flight volume in October. Same-Base Transports for Community-Based Operations during the month were 7% or 165 transports higher than October 2004, while weather-related flight cancellations decreased by 33% or 285 transports over the prior-year month," said Todd.

The company was incorporated in 1982 and is headquartered in Denver, Colorado. They saw their 52 week high just a few days ago @ $14.69. We put it in our portfolio at $13.99. Their 52 week low was just six months prior @ $8.22. Air Methods trade on the NASDAQ under (AIRM).

Air Methods is seeing long-term contracts being renewed from 3-10 years. They are improving on their bottom line with a decrease in maintenance expense per flight hour combined with increased collection rates for patient transportation.

If Air Methods can continue to increase collection of transportation costs and improve billing processes could they make your portfolio a high flyer?

Run Bull Run!

2005-11-04T08:03:00.001-08:00

Current Value of the SOW Portfolio:

$111,298.52

Simple Return: 19.55%

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S & P 500 Value : $108,997.57
Simple Return: 1.16%

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Treasury Bond Value : $99,383.91
Simple Return: -4.40%

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Individual Stocks continue to outperform equal investments in the S & P 500 (1.16%)and the TLT Treasury Bond index (-4.40%).
Be sure to check out other Stocks of the Week to see if it's a pick to include in your portfolio.

Past performance does not guarantee future performance. We make no recommendations!

Please call or write if you have questions about how to make money in stocks, bonds and real estate. You can reach me during office hours at 336-778-0543 or write me

STOCK OF THE WEEK : CHECKERS DRIVE IN

2005-11-04T07:40:00.000-08:00

Checkers Drive-In Restaurants, Inc. is the 9th largest hamburger chain and the largest double drive-thru restaurant chain in the United States. Checkers (CHKR) develops, produces, owns, operates, and franchises quick service “double drive-thru” restaurants under the two brand names Checkers (CHKR)and “Rally’s Hamburgers®”. The restaurants are designed to provide fast and efficient service and appeal to guests of all ages. The double drive-thru concept allows Checkers (CHKR) and Rally’s Hamburgers® to capitalize on the fact that approximately 50% of all quick-service food business is drive-thru. Guests can also enjoy a 1950’s flashback with walk-up ordering and outdoor dining in the outside picnic area at most locations. Founded in 1986, Checkers (CHKR) went public in 1991. Headquartered in Tampa, Fl Checkers (CHKR) is traded on the NASDAQ stock market.
Today, there are 203 company-owned and 590 franchised restaurants in 27 states. Most of the restaurants are in the Southern US; they still feature the 99-cent burgers. With chicken and fish sandwiches on the menu, kids love these type restaurants. However, to appeal to the grown ups in the family, Checkers has announced the Jim Beam(R) Double Cheddar burger and Cheddar Chicken sandwiches made with Jim Beam BBQ Sauce. These new adult- focused sandwiches are topped with slow-cooked Jim Beam Bourbon BBQ sauce, grilled red onions, and smoked cheddar cheese.

As the Official Burger and Drive-Thru Restaurant of NASCAR, Checkers/Rally's recognizes the NASCAR NEXTEL Cup Series team with the best pit road performance each week with a $10,000 prize. At the end of the 2005/06 season, Checkers /Rally's will award the $100,000 grand prize to the team that earns the most Checkers/Rally's Double Drive-Thru Challenge wins throughout the race season.

On October 19th Checkers announced earnings for their 3rd quarter ending September 12, 2005. Total revenue, including franchise royalty and fee income, was $43.2 million for the quarter ending September 12, 2005, compared to $45.0 million for the quarter ending September 6, 2004. The first three quarters of 2005 compared to a year ago showed that Company-owned and Franchised same-store sales grew 3.7% and 2.3%, respectively. Company-owned restaurants generated sales of $38.4 million versus $40.7 million in the third quarter of 2004, as the Company operated 7 fewer restaurants this year. The reduction in restaurants was primarily due to the sale of Company-owned restaurants to franchisees. The Company estimates that Company-owned restaurant sales were impacted by $800,000 during the 3rd quarter of 2005 due to store closures related to Hurricane Katrina.

During the 3rd quarter of 2005, Company-owned same-store sales increased 0.2%, marking positive same-store sales results for the Company in eighteen of the last nineteen quarters. Franchise royalty revenue increased to $4.7 million from $3.9 million in the 3rd quarter of 2004, while franchise same-store sales declined 2.0%.

Net income for the 3rd quarter of 2005 was $.10 per share, down $0.03 per share versus last year or $1.2 million versus $1.6 million. Unusual items in the 3rd quarter included $840,000 for Board of Directors fees up from $544,000 in the prior year, and $250,000 hurricane-related insurance deductible expense. In addition, the Company recorded $746,000 in income tax expense for the quarter, although only minimal income taxes are expected to be paid in 2005, as net operating loss carry forwards will be used to offset the majority of taxable income.

Keith Sirois, Checkers (CHKR)Drive-In Restaurants, Inc.'s Chief Executive Officer and President, felt their core operations were solid and their fundamentals remained positive. Significant resources in this quarter went to address the disruption caused by Hurricane Katrina to their Company-owned and franchised operations in New Orleans. The Hurricane closed 20 of their company-operated stores in New Orleans, 8 of which are back in operation with sales currently exceeding pre-hurricane sales of over 15%. However, the recovery and recording of insurance proceeds will benefit future quarters.

Mr. Sirois said "In this cost conscious environment, our ability to convey a compelling price/value proposition is critical to our performance. While we understand the effect high gasoline prices are having on our guests, we also recognize the opportunity it offers us to attract new customers to our brand, as they trade out of full service to quick service restaurants."

Are you willing to drive up and take home lunch or dinner? That is what Checkers/Rally’s is counting on. Their 52 week high and low come within 5 months of each other- High on 9/30/05 @ $15.36 and Low on 4/15/05 @$11.55. Opening today at $14.60, up 21 points, is Checkers on a Rally to beat its competition?

STOCK OF THE WEEK: HONDA:STRONG LINE UP

2005-10-24T09:22:00.000-07:00

The Honda Motor Co
(HMC) manufactures automobiles, motorcycles, portable generators and lawn motors. They develop and manufacture a wide variety of products, ranging from small general-purpose engines to specialty sports cars that incorporate their internal combustion engine technology. The Group
also provides financing for their products.

Honda's International office is located in Tokyo and has approximately 319 subsidiaries throughout the world including North America, Pakistan, the Philippines, India, South America and Europe.

The Japanese always seem to work hard developing state of the art products. Case in point, Honda introduced the first mass-market gas-electric hybrid car with the introduction of the Civic Hybrid in 2001.

The 2005 Honda FCX, the world's most advanced production fuel cell vehicle, is once again breaking new ground. Now fitted with Honda's
all-new, originally developed fuel cell stack (Honda FC Stack) the FCX is capable of starting and operating at temperatures as low as -20 C (-4 F) with improved performance, range and reduced build complexity. This new version of the FCX has received significant engineering upgrades, such as the capability of the stack to operate at below freezing temperatures and remain operational at high temperatures up to 95 C (203 F).

Honda
is not the biggest or most prestigious automaker compared with industry giants like Toyota and GM but they are a diversified manufacturer with total consolidated sales of about $80 billion. The automotive division provides about 80% of sales, motorcycles accounting for another 10%, and power products and financial services making up the remaining 10%.

To make up for their size, Honda
has developed a highly regarded flexible manufacturing system and hyper efficient supply chain that help hold down costs. Also, by trying to locating their manufacturing facilities near customers, Honda
has lower logistics costs, reduced exposure to foreign-currency fluctuations, and engineers who better understand consumer needs.

Coming directly from their web site- Honda's
success in the global marketplace relies on its commitment to continued investment in America's future. That's been their philosophy since they first started U.S. operations in 1959. It's what they believe in. It's what the consumer expects, and it's why they will continue to grow in America.

On a personal note, I have owned the same Honda Accord for the last 20 years. When I met my husband Chuck, he also owned a Honda Accord. Once we had children, we test drove all the mini vans on the market. We chose the Odyssey over the Sienna. Chuck’s mother drives an Accord and his father just replaced his Cadillac with an Accord. We feel and still do that Honda
offers the consumer high-quality and very popular products. Everywhere I look I see the Honda Element. My 12 year old daughter already has her eye on an orange one. Their newest product, the “Ridgeline” truck might be in my future.

This morning, Monday October 24th (HMC) closed at $27.40, up $3.80 from their 52 week low of $23.55 on 10/25/04. They reached their 52 week high of $27.73 on 9/20/05. 2005 has shaped up to be tough for most of the auto industry. However, Honda
seems to have a strong lineup of smaller cars which in turn use less gas. Remember, their financial division that makes up about 3% of sales now. Is this a growth area? The other question is will Honda keep working harder than their competitors to create a better, more fuel efficient “mouse trap” than the other car manufacturers?

2005-10-24T06:28:00.000-07:00

Current Value of the SOW Portfolio:

$106,008.56

Simple Return: 18.98%

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S & P 500 Value : $102,518.78
Simple Return: -.89%

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Treasury Bond Value : $98,700.51
Simple Return: -1.26%

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Individual Stocks continue to outperform equal investments in the S & P 500 (-.89%)and the TLT Treasury Bond index (-1.26%).
Be sure to check out other Stocks of the Week to see if it's a pick to include in your portfolio.

Past performance does not guarantee future performance. We make no recommendations!

Please call or write if you have questions about how to make money in stocks, bonds and real estate. You can reach me during office hours at 336-778-0543 or write me

WHY WE BOUGHT AMERICAN AIRLINES

2005-10-10T08:06:00.000-07:00

Last week, we cut our losses and sold four stocks in our portfolio that were consistently not performing and reinvested the buy out in AMR. American Airlines is one of two experienced carriers who have managed to operate under less than optimum conditions to make a profit. On July 20, (AMR). reported quarterly profits for the first time in a great while. (AMR). has proved they are one of the strongest airlines and the most likely to be successful over the long haul.

Several things were responsible for the quarter's numbers. The airline industry is seeing improvements. (AMR). grew numbers while experiencing higher load factors and passenger growth. This agrees with the strengthening demand being seen in the airline industry.

Aditionally, this long time airline carrier continues to lower its operating costs. Not counting fuel, cost per available seat mile (CASM) at (AMR). decreased 5%, over the prior-year period. (AMR) and other airlines realize low costs are the key to success. While American Airlines may not be closing the gap quickly with airlines like Southwest, LUV), they are holding their position over their long time peers.

American Airlines has one of the most extensive domestic networks and attractive international route systems, making it a preferred choice for many business travelers. They are putting their planes where there is the least amount of low-cost competition: flights to Europe and Asia. These routes are longer than most domestic and Latin American routes, and therefore less like a commodity.

The company has seasoned leadership; President and CEO Gerard Arpey has worked for American since 1982 and Ed Brennan, Chairman has been an (AMR). director since 1987. Highly respected and financial experts in the business, (AMR). strategy is survival. Management has been renegotiating labor agreements, cutting discretionary spending, and improving the efficiency of many of its back-office functions to improve profitability. (AMR) continues to cut its ticket-distribution costs by sending customers to its Web site, where transaction costs are much lower than through a sales agent.

Optimism remains high about the pension bill that stands to ease the financial pinch facing U.S. airline carriers. According to the latest version of a pension reform bill in the U.S. Senate, both (AMR). and (CAL) will be given extra time to address the under funded status of their pension plans. The same privilege was granted last week to Northwest and Delta after the two carriers filed for bankruptcy protection. The pension bill, which still needs to be discussed in the full Senate and in the House of Representatives, would help reduce (AMR) immediate financial burden.

Airline stocks fell on Friday but closed out the week with a 6.4% gain as investors took heart in oil prices that saw futures close at levels not seen since July. American closed at $12.30 up 11.8% for the week of October 3rd.

Founded in 1982, (AMR) is the parent company of American Airlines and other aviation companies headquartered in Forth Worth, TX. (AMR)">American provides passenger and cargo transportation to 250 cities through it's major hubs in Dallas-Fort Worth, Chicago, LA, and NY-LaGuardia.

Today, all airlines operate in an extremely uncertain industry. With the unpredictability of fuel prices, labor woes and poor economic conditions lurking behind every cloud, We believe there a silver lining for the future of American Airlines.

STOCK OF THE WEEK: CONTINENTAL AIRLINES: POISED FOR ALTITUDE

2005-10-06T08:23:00.000-07:00

Despite Hurricanes Katrina and Rita, Continental Airlines Inc. (CAL) recently reported a 9.8% increase in their September traffic and analysts expect Continental to earn 8 cents a share in the third quarter. This good news comes after a 2nd quarter profit July.

The airline said their strong performances in July and August helped offset some of the negative impacts from the Hurricanes as well as higher fuel prices. Continental Airlines Inc. estimates that the adverse impact in September on operating results from Hurricane Rita was about $25 million. After the Rita storm, the airlineInc.helped evacuate Houston residents by cutting fares and also waived change fees for travelers who changed their travel plans.

Continental Airlines Inc.operates the world's six-largest air carrier, transporting passengers, cargo, and mail with hubs in Newark, Houston, and Cleveland. Its ExpressJet affiliate also operates regional planes as Continental Express. Continental operates a fleet of more than 350 aircraft with about 42,000 employees.

Continental Airlines Inc. said it flew 6.2 billion consolidated revenue passenger miles, or RPMs, up from 5.6 billion a year earlier. A revenue passenger mile is one paying passenger flown one mile. Continental said September's consolidated load factor (percentage of seats filled) was 77%, 2.5 points above last year's load factor of 74.5%.

Focusing on domestic flights, the carrier reported a domestic mainline load factor of 79%, 4.7 points above a year earlier and international mainline load factor of 75.4%, 1 point below September 2004.

A bright star in the sky? The average cost per available seat mile of the other major airlines in 2004 was almost 9% higher than Continental's, while the average revenue per available seat mile was about 1% lower. Continental may be one of the strongest major airlines, and wild swings in share price can make for tempting speculative trades.

The firm has announced plans to purchase 10 Boeing 787 Dreamliners as part of its effort to modernize its fleet and cut costs with more-efficient and less maintenance-intensive planes. Continental seems to be avoiding the temptation to grow at all costs.

Thanks to relatively good relations with its employees, Continental has avoided disruptive labor disagreements and maintains labor expenses lower than the major airline average. However, a Defined-Benefit Pension Bill sits on the floor of the Senate. If it makes it through the healthy airlines could face an estimated $10.4 billion in minimum pension contribution requirements over the next four years, more than some may be able to afford and stay in business. However, Sen. John Cornyn, R-Texas, has placed a hold on the legislation that could prevent it from coming to the floor.

Continental Airlines Inc. opened on Monday October 3th at 9.70. Are the airlines seeing a strengthening demand for their industry? If they stay focused on improving customer service, seeking business travel, and cutting costs I believe Continental is a stock poised to catch some altitude?

BUY & SELL: FAITH IN THE AIRLINE INDUSTRY

2005-10-06T07:57:00.000-07:00

Current Value of the SOW Portfolio:

$105,412.88

Simple Return: 23.87%

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S & P 500 Value : $99,476.22
Simple Return: .04%

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Treasury Bond Value : $94,918.88
Simple Return: -1.08%

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Our Stock of the Week addition refects our faith in the survival of the airline industry. We sold four of our lower performing stocks and reinvested those proceeds into AMR

This week we chose Continental (CAL) for the Stock of the Week. Current performance is listed above.

Individual Stocks continue to outperform equal investments in the S & P 500 (.04%)and the TLT Treasury Bond index (-1.08%).

Be sure to check out other Stocks of the Week to see if it's a pick to include in your portfolio.

Past performance does not guarantee future performance. We make no recommendations!

Please call or write if you have questions about how to make money in stocks, bonds and real estate. You can reach me during office hours at 336-778-0543 or write me

Television Article | Reuters.com

2005-10-05T14:46:00.000-07:00

SELLING STOCKS: BUYING AMR

2005-10-05T13:17:00.000-07:00

After reviewing the Stock of the Weekportfolio this week We have decided to sell a few of our stocks that seem to have fallen into Bearish hands. Dillard’s (DDS), Joann’s Fabric (JAS), Spartan Foods (SPTN) and Russell Athletic (RML).

With individual stocks outperforming the S& P 500 and the 10 year treasury bond, each company was evaluated to see why it has not stood firm with other market performances. One common thread reoccurs: these businesses are tied to the retail sector. Perhaps rising energy prices, increase costs to transport goods, two major hurricanes and even Mr. Greenspan’s attempts to slow the economy are possible reasons for stock declines. (DDS) lost six stores in the Southeast due to the hurricanes. Dillard’s (DDS), sells upscale clothing which is a sector usually hit hard when consumers have less discretionary money to spend.

(SPTN) has been struggling recently with a major stocker holder group demanding that management enhance shareholder value. In other words, they have some internal problems as well as rising costs to transport goods to stores.

Russell Athletic (RML). just lost the sale of Jerzees brand boys sweats at all of the Wal-Mart locations. This is 2-3% of their revenue. Russell Athletic (RML). has also been affected by the hurricanes through damage to merchandise and distribution routes as well as rising costs to transport goods.

Quarterly sales at Joann’s Fabric (JAS), have been disappointing and present Joann’s Fabric (JAS), with additional challenges in meeting their 2005 performance expectations. Even with their strongest sales months ahead (September –January), they have an uphill battle. Additionally, they recently lost two of their top executives.

Even with a few “out-of-favor” choices, our Stock of the Week portfoliois still rolling on the positive side.

Moneys returned from the sale of these four stocks have been reinvested in AMR. We firmly believe the airlines are going to survive and have great faith in this stock pick to add to our Stock of the Week Portfolio. Look for Continential to be added to the portfolio as our next Stock of the Weekpick.

2005-09-26T07:07:00.000-07:00

Current Value of the SOW Portfolio:

$105,277.81

Simple Return: 18.81%

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S & P 500 Value : $97.299.64
Simple Return: 1.95%

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Treasury Bond Value : $91,596.21
Simple Return: -.39%

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Stock of the Week Homeruns include:

Gamestop (GME) earning 71.08%;
Diedrich Coffee (DDR) returning 67.36% ; and
US Gypsum (USG) 84.42%.
Individual Stocks continue to outperform equal investments in the S & P 500 (1.95%)and the TLT Treasury Bond index (-.39%).

Be sure to check out other Stocks of the Week to see if it's a pick to include in your portfolio.

Past performance does not guarantee future performance. We make no recommendations!

Please call or write if you have questions about how to make money in stocks, bonds and real estate. You can reach me during office hours at 336-778-0543 or write me

STOCK OF THE WEEK

2005-09-26T07:02:00.000-07:00

Interstate Hotels and Resorts
(IHR) could be the nation's largest independent hotel management company.
The group's principal activity is to manage, lease, and operate a portfolio of hospitality properties, and provide related services in the hotel, corporate housing, resort and golf markets.
their portfolio is diversified by franchise and brand affiliations.
The group manages more than 300 hotels with 69,000 rooms in 41 states, the District of Columbia, Canada and Russia.
(IHR) has approximately 8,000 corporate apartments under lease in the United States, Canada, France and the United Kingdom.
The groups
hotels are operated under nationally recognized brand names such as Hilton, Sheraton, Westin, Radisson, Marriott, Doubletree, Embassy Suites and Holiday Inn.

IHR’s roots trace back to 1941 and today is the result of several mergers involving prominent and successful hotel management and ownership companies. With each merger,
Interstate Hotels and Resortshas grown larger and stronger, enabling it to provide an unmatched level of service and value to hotel owners.

Interstate Hotels and Resortshas Interstate Hotels and ResortsThe hotel business has been in a decline mode since 2001. This has put Interstate Hotels and Resorts into the red. However, posting a stronger 2nd quarter ending June 30th than expected, the outlook for Interstate appears to be good. the group also has a long term management contract with MeriStar (MHX) that runs until 2026 and carries termination fees. The recent sale of a Residence Inn in Pittsburgh for $11million will also help pay down its loans and give them working capital for future growth strategies.

Unfortunately, Interstate lost a hotel in New Orleans during Hurricane Katrina, but the companyis strong enough in other key cities to overcome this set back.

This loss combined with higher gas prices has pushedIHR's stock down from the 52 week high of $ $5.80 on Jan 05 to closing at $4.52 on September 26th.

Will companies continue to travel to upscale hotels for business meetings? Will you and I travel to upscale hotels for relaxation? That is the million dollar

2005-09-13T10:11:00.000-07:00

Current Value of the SOW Portfolio:

$104,798.97

Simple Return: 23.84%

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S & P 500 Value : $94,120.
Simple Return: 2.93%

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Treasury Bond Value : $89,173.
Simple Return: 1.38%

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Stock of the Week Homeruns include: Gamestop (GME) earning 81%; Diedrich Coffee (DDR) returning 79% ; and US Gypsum (USG) 100%. Individual Stocks continue to outperform equal investments in the S & P 500 (2.93%)and the TLT Treasury Bond index (1.38%).

Be sure to check out other Stocks of the Week to see if it's a pick to include in your portfolio.

Past performance does not guarantee future performance. We make no recommendations!

Please call or write if you have questions about how to make money in stocks, bonds and real estate. You can reach me during office hours at 336-778-0543 or write me

STOCK OF THE WEEK: TOMPKINS PLC

2005-09-13T10:05:00.000-07:00

Tomkins (TKS) is an international engineering business holding the market leader position in power transmissions (40% share). It is also the world’s largest wiper blade manufacturer. Listed on both the London and NY stock exchanges, the company is organized into two business segments; Industrial & Automotive; and Building Products, consisting of various business areas which operate in a variety of end markets throughout the world.

The Industrial & Automotive division manufactures several systems and components through 4 business areas; Powertrain is working hard to develop technology which addresses our main issue today, fuel economy, safety legislation, and the tightening emissions requirements.

The Building Product division manufacturers air handling components, vinyl and aluminum windows and doors, bath fixtures and other building components for residential and non-residential. The rebuilding in the Gulf Coast could benefit this division.

Founded in 1925 and headquartered in London the company has sales of approximately 3 billion and employs 40,000 people throughout the world. An acquisition in 1996 brought the company global standings.

Closing on Friday, Sept. 9th at $21.41 the company is just slightly off of their 52 week high of $22.48 on 2/15/05. Their 52 wk low fell to $18.24 on 10/4/04. At 12 times earnings, Tomkins stock trades at a significant discount to their competitors.

CEO, Jim Nicol has set their business focus on manufacturing excellence, the steady emphasis on developing new products and expanding into new markets.

It looks like fuel conservation and rebuilding are going to be the dominate theme for the US economy over the next few years. If you like a company with diversity, Tomkins (TKS) could be a good choice.

2005-09-01T09:57:00.000-07:00

Current Value of the SOW Portfolio:

$96,274.44

Simple Return: 19.39%

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S & P 500 Value : $89,577.84 Simple Return: 2.44%

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Treasury Bond Value : $86,150.53.Simple Return: -2.61%

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CAL is still our top performance airline stock returning 57%

US Gypsum has earn 96% while GME continues to bring in 67%. Individual Stocks continue to outperform equal investments in the S & P 500 and the TLT Treasury Bond index fund . If you're interested in talking about individual stocks, write me or check out my blog Stocks or Bonds

STOCK OF THE WEEK: DELMONTE

2005-09-01T09:35:00.000-07:00

Delmonte Foods: Improving for Financial Significance

Del Monte Foods Company’s (DLM) quality brands are a leader in the packaging-food industry and can be found in virtually every food store in America today and in over 80% of all U.S. households.
(DLM) was created by the merger of the Del Monte canned fruit and vegetable operations with the spin-off of Heinz’s tuna, pet food, soup, and infant food businesses in December 2002. It’s two segments, Consumer Products and Pet Products are some of the most trusted brands like Del Monte®, StarKist®, S&W®, Kibbles 'n Bits®, Pup-Peroni® and 9Lives®. These products deliver 75% of the company's annual grocery sales, with category leaders accounting for over two thirds of the total.

Del Monte Foods seems to be positioned well in the $117 billion dry grocery segment of the U.S. retail food market and distributes its products in all areas. The company also owns marketing rights for the Del Monte brand throughout South America. Founded in 1916, it’s headquartered in San Francisco. Del Monte employs 8,500 full time employees and approximately 9,800 additional seasonal workers. The company operates 16 production facilities and 15 distribution centers in 14 states, and operations in American Samoa, Canada, Ecuador and Venezuela.

Dedicated to quality, the company was the first National Food Processor to carry nutrition information on its labels.
It is also recognized as a leader in promoting sound environmental policies and practices.

Del Monte has been reformulating products, updating packaging, and investing marketing dollars in brands like StarKist® and Kibbles 'n Bits® to revive the Heinz brands it acquired in 2002.. Once they have succeeded in improving these brands, the upside could be significant for the company. About 30% of their growth categories are in tuna pouches and premium fruits.

In their year-end report to share holders on June 23, 2005, Richard G. Wolford, Chairman & CEO highlighted several areas that should fortify Del Monte’s position as an industry-leader of quality food products:
-- Increase the branded focus of the product portfolio

-- Streamline the asset and cost profile

-- Accelerate innovation-driven organic growth in higher margin categories

-- Execute financial strategy for optimizing debt management and returning value to shareholders

Closing on August 29th at $10.90, (DLM) is close to its 52 week high in January of $11.65. Overall sales growth funs at less than 2% annually, however management forecasts that increased marketing will push future growth to 4%.

Del Monte products have been on my kitchen shelves for years. You decide if their vegetables are “green” enough for your portfolio.

2005-08-04T10:24:00.000-07:00

Current Value of the SOW Portfolio:

$93,782.44

Simple Return: 22.36%

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S & P 500 Value : $86,384.52
Simple Return: 3.11%

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Treasury Bond Value : $78,853.
Simple Return: -83.33%

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80% of the SOW Portfolio is returning 17% or better. Airline Stocks are through the roof with current earnings in AWA and AMR at better than 55%, CAL is at 91%

and GME with returns at 69% respectively. Individual Stocks continue to outperform equal investments in the S & P 500 and the TLT Treasury Bond index fund which turn a nose dive this week.

Be sure to check out Kupsky's review of this week's Stock of the Week to see if it's a pick you want to include in your portfoio.

Past performance does not guarantee future performance. We make no recommendations!

Please call or write if you have questions about how to make money in stocks, bonds and real estate. You can reach me during office hours at 336-778-0543 or write me

STOCK OF THE WEEK: SPORTS CHALET

2005-08-04T07:53:00.000-07:00

Sport Chalet, Inc. operates specialty sporting goods superstores in Southern California and Nevada. The Company sells traditional sporting goods merchandise like footwear, apparel and other general athletic products and nontraditional merchandise like downhill skiing, mountaineering and SCUBA products. In addition, Sport Chalet also offers value-added services from “The Experts” enabling their serious sports enthusiast customers to take lessons, giving them a complete experience from getting advice to receiving training in their sport. In addition, they operate a retail e-commerce store at http://www.sportchalet.com/

Their legacy started on April 1, 1959, when a young man named Norbert Olberz heard about a little ski shop for sale. It was located north of Los Angeles. In 1981, Norbert doubled the size of his Company by opening a store in Huntington Beach and began to build a loyal following of beach customers.

In 1992, Sport Chalet went public, trading on the NASDAQ Stock Market under (SPCH). In 2001, Sport Chalet expanded beyond Southern California for the first time, entering Nevada. In 2003, Sport Chalet opened stores in Northern California. Today they have 36 stores and are continuing to expand.

In June 1998, six years after gong public, the founder of Sport Chalet, Norbert Olberz gave nearly 300,000 of his own Sport Chalet shares to all employees who had been with the company for more than 10 years and managers with more than one year of company loyalty in celebration of its most profitable year in sales and gross profits.

Trading on July 28th @ $17.05. 48% higher than their 52-wk low (11/3/2004): $11.51. Their 52-wk high (6/29/2005):$19.50

Their goals for 2005 are to leverage the investments they have made to intelligently grow. This year they expand into Northern California with three new stores. Their first Central California store will open and they will add another Southern California location. These five new store openings will set a record for new store growth.

Remodeling older stores will give them 44% of their store base being three years old or less. Their employees have been challenged to work more closely together than ever before to improve their logistics processes, bringing in merchandise to market even faster yet at a lower cost and making sure every item is received in their stores in "floor-ready" condition.

Are they on the right financial track? On June 28, 2005 Sport Chalet, Inc. announced the results for its fiscal year ending March 31, 2005. Sales increased 17.0%, from $264.2 million last year to $309.1 million this year. The increase was the result of opening five new stores this year and three last year, as well as a same store sales increase of 5.7%.

The same store sales increase is due to better inventory assortments compared to the same period last year and increased customer traffic from the appeal of winter related merchandise. Sales of winter related merchandise were driven by record winter weather conditions at the resorts frequented by their customers. Same store sales excluding winter related products increased 4.7%.

Gross profit margin increased from 30.3% last year to 30.9% this year primarily due to a strong winter season, which reduced the need for markdowns as well as reduced costs from more efficient inbound logistics.

Net income increased $1.5 million, or 32.9%, from $4.6 million to $6.2 million this year.

Commenting on the results, Craig Levra, Chairman and CEO said, "Our outstanding results for the fiscal year reflect the consistent and effective execution of our strategic plan. The entire Sport Chalet team contributed to a very successful year during which we made strides in both enhancing our operational performance and implementing our growth plans. As we expand into Arizona in the new fiscal year, we believe we are well positioned for continued strong performance.

“As we announced in a separate release today, the Company’s board of directors has proposed a recapitalization plan that is designed to facilitate the orderly transition of control from Norbert Olberz, the principal stockholder, to the Company’s management and increase financial flexibility for the Company and its stockholders. The proposed recapitalization plan retains current stockholders’ existing voting interests and allows management to maintain our strong culture and continue to focus on our growth strategy. Overall, we are pleased with our results for fiscal 2005 and encouraged about the direction of our business. We remain committed to our strategy to generate long-term top and bottom line growth and increase stockholder value.”

Being debt free for the last seven years, this forty-five year old sports company seems to have a feel for their customers and what they want. Can Sports Chalet successfully have a “changing of the guard”, add new stores and still be a climber in this Bull Market?

STOCK PERFORMANCE SOARS

2005-08-01T04:16:00.000-07:00

Current Value of the SOW Portfolio:

$89,552.18

Simple Return: 23.26%

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S & P 500 Value : $82,282.78
Simple Return: 3.12%

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Treasury Bond Value : $76,435.
Simple Return: .62%

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As you can see, our SOW Portfolio continues to outperform equal investments in the

S & P 500 index and in the TLT Treasury Bond index fund. Airline Stocks are through the roof with current earnings in AWA and AMR at better than 55%, CAL is at 97%

USG, and GME also show incredible returns at 46% and 72% respectively.

Be sure to check out Kupsky's review of this week's Stock of the Week to see if it's a pick you want to include in your portfoio.

Past performance does not guarantee future performance. We make no recommendations!

Please call or write if you have questions about how to make money in stocks, bonds and real estate. You can reach me during office hours at 336-778-0543 or write me

STOCK OF THE WEEK: ZONES INC

2005-08-01T04:10:00.000-07:00

Stock of the Week: Zones, Inc.

Zones Inc and its subsidiaries principal activity is to resell name-brand information technology products to the small to medium sized business and the public sector. The products are offered through catalogs, trade publications and a telemarketing sales team. They are also sold through outbound and inbound account executives, specialty print and e-catalogs and the Internet. They market more than 150,000 products, which include printers, monitors, keyboards, modems, scanners and desktop. These products are supplied by more than 2,000 manufactures such as Apple, Compaq, Hewlett-Packard, IBM, Microsoft and Toshiba. The Group conducts its business in the United States under the service marks The PC Zones (R) and The Mac Zone (R) registered with the United States.

Incorporated in 1988, Zones, Inc., (ZONS) is headquartered in Auburn, Washington. Traded on NASDAQ since July 1996, they closed July 18th @ $3.72. Their 52 week high $7.40 came on 11/19/04 and their 52 week low $2.45 came on 9/12/04.

Their business model relies on building and maintaining relationships with their customers by anticipating their needs and providing the customer with service they have come to expect from Zones. They strive to deliver the best-in-class service by offering the most competitive value based on:

Price. Competitive pricing.

Availability. With more than 150,000 products available, Zones delivers.

Information. Because the technology industry is constantly changing with new and upgraded products and services, Zones Account Executives receive continuous training.

Fulfillment. Zones goal is to deliver every order complete- and on time.

Service. Zones offer a breadth of services that support the customer IT relationship. For example, their free customized online order management system called ZonesConnectTM helps their customers reduce administrative costs and streamline their purchasing process. With additional services such as asset tagging, imaging and product upgrades, Zones is a proactive business partner throughout the sales cycle, from presale to after the sale.

Zones Announced its Financial Results for the Year and Quarter Ended December 31, 2004. Highlights-

Sixth consecutive profitable quarter
2004 earnings per share increases to $0.32 compared to earnings per share $0.11 in 2003
2004 net sales increased 8% year over year

Net income for the year ending December 31, 2004 improved to $4.7 million, or $0.32 per diluted share, compared to $1.6 million, or $0.11 per diluted share, for the corresponding period a year ago. For the year ended December 31, 2004, net sales increased 7.6% to $495.6 million from $460.8 million for the corresponding period of the prior year.

Firoz Lalji, President and CEO, remarked, "We just completed our 6th consecutive quarter of profitability and by any measure our financial performance in 2004 was outstanding. Looking ahead to 2005, we remain committed to the initiatives that were the impetus behind our 2004 success. We intend to add to the number of account executives, which we increased 20.1% during 2004, diversify our customer mix and accelerate our programs to raise our presence in the public sector market while maintaining a sharp focus on reducing our operating expenses."

Operating highlights included Fourth quarter 2004 direct online sales increased 109.3% over the prior year, representing 20.6% of total sales. While consolidated outbound sales to the small to medium sized business, large customer account and public sector markets were $115.8 million in the fourth quarter of 2004 compared to $115.2 million in the same period of 2003.

Gross profit margins were 11.6% in the fourth quarter of 2004, representing an increase from 10.7% in the fourth quarter of 2003, as well as a sequential increase from 10.9% in the third quarter of 2004. The sequential and year over year increase in gross profit percentage is due to product mix and an improvement in related vendor programs.

The Company's balance sheet remained strong and ended the year with a cash balance of $6.5 million. Consolidated working capital was $27.0 million at December 31, 2004 compared to $20.9 million at December 31, 2003.

Zones has 3 main competitors (CDWC) @$56.96; (NSIT) @$20.07 and (PCCC) @ $6.23. Notably, on June 3rd Microsoft announced that Zones was the recipient of the Microsoft's Operational Excellence Award for fiscal year 2005. This prestigious award was presented at Microsoft's annual Channel Partner Summit and recognizes that Zones has exceeded rigorous standards for operational excellence.

With a vision to be a learning community, empowered to serve their customers with integrity, commitment and passion they must be doing something right. Check out their web site and see for yourself.

Are you ready for the Zones?

INDIVIDUAL STOCK PERFORMANCE CONTINUES TO SHINE

2005-07-15T13:00:00.000-07:00

Current Value of the SOW Portfolio:

$82,086

Simple Return: 19.57%

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S & P 500 Value : $77,863
Simple Return: 2.73%

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Treasury Bond Value : $73,082
Simple Return: 1.56%

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As you can see, our SOW Portfolio continues to outperform equal investments in the

S & P 500 index and in the TLT Treasury Bond index fund.

Be sure to check out Kupsky's review of this week's Stock of the Week to see if it's a pick you want to include in your portfoio.

Past performance does not guarantee future performance. We make no recommendations!

Please call or write if you have questions about how to make money in stocks, bonds and real estate. You can reach me during office hours at 336-778-0543 or write me

STOCK OF THE WEEK: JEWETT CAMERON

2005-07-15T12:57:00.000-07:00

The Jewett-Cameron Trading Company, Ltd., Incorporated in 1987 and is headquartered in North Plains, Oregon. Jewett Cameron. Through its subsidiaries, they primarily operate as a wholesaler of lumber and building materials, as well as processor and distributor of agricultural seeds in the United States. The Company also processes and distributes industrial wood and other specialty building products.

JCT’s operational facilities are located in North Plains and Portland, Oregon, and Ogden, Utah. Its wood products include fencing, residential decking, lattices, garden timbers, gates, arbors, pine shelving and furring, dimension lumber, plywood and oriented-strand-board, fire-retardant dimension lumber/plywood, and dowels.

The Company’s non-wood products comprise kennels, greenhouses, portable storage buildings, metal gates, and metal fencing. Its customers include transportation and recreational boating industries, original equipment manufacturers, and home improvement retailers.

The Continental Western United States is the focus of most of their distribution and is an area which includes the Pacific and Rocky Mountain Regions, as well as Alaska and Hawaii. This market area includes the five fastest growing states in the country; Utah, Idaho, Colorado, Nevada and Oregon. This region has seen an increase of 30% in building material sales during the past five years.

They also market the value-added lumber products to customers in the Eastern and Southeastern United States, shipping truckload and rail car shipments of fencing and cherry-tone garden ties.

JCT’s major customers are the leading home improvement retailers in the Western United States, including The Lowes Companies, based in North Carolina; Fred Meyer, Inc., in Portland; HomeBase, Inc., in Irvine, California; and The Home Depot, in Atlanta.

For its home improvement center customers, JCT is an inventory hub. They provide a unique and excellent level of service that is characterized by consistent quality, responsive deliver, specialized packaging, UPC labeling and most importantly, inventory levels that are based on customer needs. Most customers stores are within a days driving distance from their two main distribution centers, allowing less than full truck load shipments on a "Just-in-time" basis.

In spite of the home improvement centers huge "super stores" and mammoth inventories, their major customers still have inventory and space problems. In this fact lies the key to JCT’s growing success and superior levels of service. In addition to inventorying the large items; lumber, decking, fencing, garden timbers and lattice panels, they have developed a specialized packaging system that literally "sandwiches" and shrink-wraps each mixed load of products that might include anything from small fence post caps and dowels to handy-panels and lattice, into pallet-sized packages for rapid delivery to the individual retail outlets.

It is their fast, flexible and highly efficient distribution system, coupled with savings and efficiencies that customers value. Leveraging their many years of lumber industry experience, JCT is able to purchase product at favorable prices with savings passed on to customers. Many products are pre-tagged with the customer bar codes which translate into additional savings for home improvement center customers who can get inventory on the selling floor immediately.

Experts feel the sizzling lumber markets of 2004 will cool slightly this year and into 2006. Despite the decreases, lumber demand should remain at historic highs. The Portland-based trade association reported preliminary totals show lumber demand in 2004 reached a record 61.8 billion board feet, an increase of 8.4 percent above the previous high of 57 billion board feet set the year previous. In 2005, lumber demand is forecast at 59.6 billion board feet, down 3.5 percent, while 2006 demand should slip to 58.9 billion board feet. Although, lower, the 2005 and 2006 demand volumes would be the second and third highest in history.

All of the growth in lumber consumption came in residential construction and repair and remodeling. Housing starts roared to 1.96 million units in 2004, pushing residential lumber use to a record 26.7 billion board feet. Use of lumber in repair and remodeling also reached all-time highs of 19.5 billion board feet, fueled by record numbers of existing home sales.

They anticipate housing starts and remodeling activity will decline over the next two years as interest rates begin to move higher. Since both markets together comprise nearly 75 percent of annual lumber consumption, the drop in housing and remodeling activity will be the chief reasons for the decreases in lumber demand this year and next they feel.

However, JCT has positioned themselves with strong Non-wood areas of interest like their (4) new dog kennels produced under license for the American Kennel Club highlighted in May at the National Hardware Show. They also make an “adjustable” all steel Gate Kit System that fits all homeowners needs.

JCT continues to achieve deeper market penetration within the home improvement center market, while at the same time, expanding their territory, product mix and the services they provide clients.

In April, Jewett-Cameron announced earnings of $0.19 per share versus $0.03 for the same 6 month period last year. Trading under (JCTCF) Don Boone, President of Jewett-Cameron stated “Our earnings increase was in keeping with management’s expectations.” July 11th showed a closing price of $ 8.58- Up $.45

Just another company on a Bull run? Or is JCT diversified enough to with stand a drop in the housing market?

STOCKS OF THE WEEK :SWEET PERFORMANCE

2005-07-07T10:38:00.000-07:00

Current Value of the SOW Portfolio:

$74,772.39

Simple Return: 17.53%

~~>~>~~>~>~~>~>~~>~>~~

S & P 500 Value : $71,776.69
Simple Return: -.04%

~~>~>~~>~>~~>~>~~>~>~~

Treasury Bond Value : $69,892.42
Simple Return: 2.84%

~~>~>~~>~>~~>~>~~>~>~~

As you can see, our SOW Portfolio continues to outperform equal investments in the

S & P 500 index and in the TLT Treasury Bond index fund.

Big performers include airlines stocks (AMR up 33% and CAL up 65% over purchase prices)GME continues to soar at 68% growth and USG at 29%. J. Alexander, Team Global and Russell Corp continue to lead income potential for the total investment package to date with 28%, 24% and 22% respectively. Be sure to check out Kupsky's review of this week's Stock of the Week to see if it's a pick you want to include in your portfoio.

Past performance does not guarantee future performance. We make no recommendations!

Please call or write if you have questions about how to make money in stocks, bonds and real estate. You can reach me during office hours at 336-778-0543 or write me

A cup of Coffee

2005-07-07T05:34:00.000-07:00

The Diedrich Story is as rich as the flavor of their coffee. It all started in 1916, when Charlotte Diedrich inherited a coffee plantation in Costa Rica. Founded in 1972, Diedrich Coffee, Inc. specializes in sourcing, roasting and selling the world's highest quality coffees. Their primary brands include Diedrich Coffee, with coffeehouses primarily in California, Colorado and Texas; Gloria Jean's Coffees, established in 1979 and Coffee People, established in 1983 with coffeehouses in Oregon.

Headquarters in Irvine, California, Diedrich Coffee
trades on the NYSE under (DDRX). Their 52 week Low came on 12/1/04-@ $2.75 and their 52 week High came on 12/20/04 @$6.49. Closing on July 5th @ $4.78.

Today, Diedrich Coffee continues a rich tradition and pride for growing, selecting and roasting some of the finest coffees in the world, and serving them fresh at coffeehouses that reflect the warmth and down-to-earth feeling one gets from drinking a fine cup of coffee. The Company's 199 retail outlets, the majority of which are franchised, are located in 33 states and 13 other countries.

The Nation’s #2 coffeehouse company (behind Starbucks), Diedrich Coffee also sells its coffees through more than 460 wholesale accounts including office coffee service distributors, restaurants such as Ruby Tuesday and Ruth’s Chris Steak House and specialty retailers, via mail order and the Internet. Every Diedrich product is embraced by the Diedrich logo, which is centered by the family coat of arms.

To secure a stronger market in the US, the Company sold its international Gloria Jean's operations to its former Australian master franchisee on February 11, 2005. The Company continues to own and operate the Gloria Jean's domestic retail and wholesale business.

On June 20th Diedrich Coffee, Inc. announced operating results for the third quarter of fiscal 2005. For the twelve weeks ending March 9, 2005, the Company reported net income of $15,601,000, or $2.99 per basic share, compared to a loss of $69,000, or $0.01 net loss per basic share, for the third quarter of fiscal 2004. Results for the third quarter include an after tax gain of $2.98 per basic share from the sale of the Company's Gloria Jean's international operations.

For the thirty-six weeks ended March 9, 2005, the Company reported net income of $15,652,000, or $3.01 per basic share, compared to restated net income of $287,000, or $0.06 per basic share, for the first three quarters of fiscal year 2004.

Roger Laverty, President and Chief Executive of the Company said, "This is a fresh start for Diedrich Coffee. We believe that the sale of the Gloria Jean's international operations captured significant value for our shareholders. With over $17 million of cash, we now have resources to aggressively expand our brands in the United States, which we believe is the best market in the world for our specialty coffees. The profit contribution from the international operations was substantial, but we are excited with our prospects and we believe that successful domestic expansion can fill the void."

There are 108,000,000 coffee consumers in the United States spending an approximated 9.2 billion dollars in the retail sector and 8.7 billion dollars in the foodservice sector every year. http://www.coffeeresearch.org/market/usa.htm.
It can be inferred, therefore, that coffee drinkers spend on average $164.71 per year on coffee. The National Coffee Association found that 54% of the adult population of the United States drinks coffee daily. They also reported that 18.12% of the coffee drinkers in the United States drink gourmet coffee beverages daily. In addition to the 54% who drink coffee everyday, 25% of Americans drink coffee occasionally.

This stock may take a while before it starts to “perk” but it appears consumers will always enjoy a good cup of coffee. Can Diedrich persuade the consumer to choose their cup?

Stocks Continue to Outperform Other Investment Options

2005-06-23T04:41:00.000-07:00

Current Value of the SOW Portfolio:

$70,215.19

Simple Return: 17.76%

~~>~>~~>~>~~>~>~~>~>~~

S & P 500 Value : $68,984.80
Simple Return: 1.74%

~~>~>~~>~>~~>~>~~>~>~~

Treasury Bond Value : $66,565.65
Simple Return: 4.07%

~~>~>~~>~>~~>~>~~>~>~~

As you can see, our STOCK OF THE WEEK portfolio continues to outperform equal investments in the

S & P 500 index and in the TLT Treasury Bond index fund.

Big performers include airlines stocks (AMR up 46% and CAL up 76% over purchase prices)GME continues to soar at 62% growth and USG at 35%. Be sure to check out Kupsky's review of this weeks Stock of the Week to see if it's a pick you want to include in your portfoio.

Past performance does not guarantee future performance. We make no recommendations!

Please call or write if you have questions about how to make money in stocks, bonds and real estate. You can reach me during office hours at 336-778-0543 or write me

STOCK OF THE WEEK: DILLARDS

2005-06-23T04:31:00.000-07:00

Stock of the Week: Dillards: A NICE SHOPPING EXPERIENCE

Dillard's, Inc., located in Little Rock, Arkansas ranks among the nation’s largest fashion apparel and home furnishings retailers. Dillard's stores offer a broad selection of merchandise from wardrobe basics to home furnishings, including products sourced and marketed under Dillard's exclusive brand names. They focus on delivering maximum value to their shoppers, with fairly priced merchandise complemented by exceptional customer service.

The largest nameplate in fashion apparel retailing, the Company comprises 329 stores, spanning 29 states, all operating with one (family) name - Dillard's. They also have an appealing On-Line shopping site

William T. Dillard founded the company in 1938 and took it public on May 9, 1969. Trading on the NYSE (DDS) today (June 23st) at $24.60. Upon his death in 2002, he left a legacy of tremendous success in retailing. Today, a major part of Dillard's marketing philosophy remains based on Mr. Dillard's sound selling methods, keen attention of day-to-day organizational details, alert selection of personnel and hard work.

On March 10, 2005 Dillard's, Inc. announced operating results for its fourth quarter and fiscal year ending January 29, 2005. Net income for the 52 weeks ending January 29, 2005 was up 1.6 % over 2004 or $117.6 million

Accomplishments during the 52 weeks ended January 29, 2005 include reduction of debt to $1.64 billion from $2.62 billion (including Guaranteed Preferred Beneficial Interests in the Company's Subordinated Debentures), with cash and cash equivalents at January 29, 2005 of $498.2 million compared to $160.9 million at January 31, 2004.

Dillard's continues to focus on improvement in its merchandise mix as it reiterates management's strong belief that merchandise differentiation with special emphasis on becoming a more upscale retailer is crucial to its future success in the marketplace. The Company seeks to build and maintain customer loyalty by presenting more exciting fashion choices reflective of a younger-focused and more upscale attitude.

The Company provides merchandise from both national and their private label sources. Under-performing lines of product will continue to be eliminated and replaced with more promising brands in the Company's ongoing efforts to improve its merchandise mix. Dillard's will continue to tailor these assortments to the local demographics, reflecting not only each specific market's culture and fashion attitude but also each store's specific sizing and style needs.

Penetration of private brand merchandise as a percentage of sales for the 52 weeks ending January 29, 2005 and January 31, 2004 was 23.1% and 20.9%, respectively.

Fourth Quarter sales in the Company's Eastern region were above trend, exceeding the Company's average sales performance for the period. Sales in the Western region were slightly above trend, and sales in the Central region were below trend. Sales of lingerie and accessories significantly exceeded the Company's average sales trend for the period. However, sales of juniors' apparel, decorative home merchandise and furniture were significantly below trend.

On June 2nd, Dillard's, Inc. announced their sales for the four weeks ending May 28, 2005 were $518,965,000 compared to sales for the four weeks ending May 29, 2004 of $511,413,000. Sales increased 1% for the four-week period.

Retail is the second-largest industry in the United States both in number of establishments and number of employees. The U.S. retail industry generates $3.8 trillion in retail sales annually, approximately $11,690 per capita. The retail sector is also one of the largest worldwide. (retailindustry.about.com/)

Dillard's is a well-known brand with a strong presence in the markets in which it operates.
With Private-label items accounting for around 23% of sales, Dillard's hopes to differentiate itself from the competition while benefiting from the higher profit margins that come with private-label products, which cost less for Dillard's to offer.

Some feel that a turnaround could only be possible for Dillard’s under new or reinvigorated management. Yet, with the same family controlling both senior management and the board, can Dillard's win back customers who prefer to shop at Specialty Retailers and Discounters located off the mall? With fluctuating prices of gas at the pumps, maybe Dillard’s should look outside the “mall” and promote their savvy web-site for shopping On-Line. I’m a Dillard’s shopper and didn’t know I could shop from home.

Blogger: Stock of the Week :: Edit Post ' Stock of the Week '

2005-06-16T05:39:00.000-07:00

Blogger: Stock of the Week :: Edit Post ' Stock of the Week '

Our Stock of the Week portfolio is returning 18% more than equal investments in the S & P 500 or Treasury Yields. Climb on, The Bull is moving--

STOCKS WIN AGAIN--ROI AT 20%

2005-06-16T05:28:00.000-07:00

Current Value of this Portfolio:

$66,875.50

Simple Return: 20.19%

~~>~>~~>~>~~>~>~~>~>~~

S & P 500 Value : $64,600.29
Simple Return: 1.24%

~~>~>~~>~>~~>~>~~>~>~~

Treasury Bond Value : $61,171.32
Simple Return: 2.01%

~~>~>~~>~>~~>~>~~>~>~~

As you can see, our STOCK OF THE WEEK portfolio has been outperforming equal investments in the

S & P 500 index and in the TLT Treasury Bond index fund.

Past performance does not guarantee future performance. We make no recommendations!

Please call or write if you have questions about how to make money in stocks, bonds and real estate. You can reach me during office hours at 336-778-0543 or write me

.

STOCKS ARE CHEAP RELATIVE TO BONDS AND REAL ESTATE!

MONEY FLOWS TO THE LOWEST PRICED ASSETS!

BUY THE BIG BULL BOOM BUBBLE!

YOU HAVE TWO TO FOUR YEARS TO MAKE SERIOUS MONEY!

STOCK OF THE WEEK: ROCK -TENN

2005-06-16T05:17:00.000-07:00

FOR ALL YOUR PACKAGING NEEDS

The Rock-Tenn Company Rock Tenn is one of North America’s leading packaging companies focusing on developing packaging and paperboard products that bring high value to its customers. Founded in 1936, The Company operates manufacturing facilities throughout the United States, Canada, Mexico and Chile, and employs approximately 8,800 people. Headquartered in Norcross, Georgia, Rock-Tenn is listed on the NYSE (RKT).

The Company is set-up into three separate divisions- (1) Packaging products segment consists of facilities that produce folding cartons and solid fiber interior packaging for food, hardware, apparel and other consumer goods. (2) Merchandising displays and corrugated packaging segment consists of facilities that produce temporary and permanent point of purchase displays, corrugated packaging and corrugated sheet stock. (3) Paperboard segment consists of facilities that collect recovered paper and that manufacture 100% recycled clay-coated and specialty paperboard, including gypsum paperboard liner, 100% corrugating medium and laminated paperboard products used in book covers, furniture and automotive components.

Rock-Tenn Company has a diverse portfolio of International, National, Regional and Local customers across a wide range of consumer and industrial products. Production facilities are strategically located to provide the highest level of responsiveness. Their industry-leading structural and graphic design services, specialized manufacturing capabilities and experienced sales team give them the flexibility and resources to provide customers with new, innovative products and services.

Recently at the 2004 Paperboard Packaging Council Awards (PPC), Rock-Tenn received 22 awards. In the 61 year history of PPC this has never been achieved by a company. Some of the Consumer packaging that Rock-Tenn developed and received awards for were Delmonte, Federal Express, Bacardi, Edwards Frozen Foods, Hershey and Kraft Foods.

The research and development team at (Rock-Tenn ), seem to be a key elements in their high performance, quality way of doing business. With many trade mark products, Rock-Tenn seems to have a lead on their competitors. With the steady climb of wine consumption in the U.S. at 232 million cases in 2003 and climbing, Wineguard, their trade mark product, a solid fiber partition for protecting wine bottles during shipping, caught my eye.

Rock-Tenn Company is also one of the largest consumers of scrap paper in the country. Since the 1890’s Rock-Tenn has been handling all grades of recovered paper, including old corrugated containers, office papers, old newspapers and printers' mix. As a valued supplier to their own and outside paper mills, their job is to supply paper—regardless of the market price. That means they are in the business for the long-term and go out of their way to provide dependable paper recovery services to their customers.

On Nov. 2, 2004, Rock-Tenn Company reported financial results for the fourth quarter and fiscal year 2004, which ended September 30, 2004. Net sales for the fourth quarter of fiscal 2004 were $417.9 million, up 8.5% from the prior year quarter. The Company reported net income of $6.6 million for the quarter ending September 30, 2004.

Rock-Tenn Company Chairman and Chief Executive Officer James A. Rubright stated, "Fourth quarter sales increased in each of our segments, as we expected, due to strong demand for our products. Aggregate segment income also increased compared to the prior year quarter due to margin from higher sales, significant cost reductions, and some realizations from announced price increases more than offsetting much higher energy and raw material prices.”

The Company reported net sales of $1.6 billion for the fiscal year ending September 30, 2004, a 10.3% increase from the previous year. However, net income was down $17.6 million, for the fiscal year ending September 30, 2004, compared to $29.6 million, in the prior fiscal year.

"Our 10.3% increase in sales for the fiscal year reflects the strong competitive positions we have built in our businesses through investments in cost-reducing technologies, which allowed us to take advantage of strengthening demand for our products. Throughout the year we built our market-share in the folding carton business. We also increased sales of merchandising displays through sales to new customers and growth in our position at other key customers. Our paperboard mills also demonstrated their strong market position, operating at 96% of capacity over the year, taking less than 2% of economic downtime."

After looking at Rock-Tenn’s financial report for 4th quarter and year end you can see why their 52 week high came on 6/29/04 @$17.00. Why, then, did their 52 week low of $9.75 come just a few months ago? (4/28/05). 2nd quarter financial results ending March 31, 2005 were not as welcoming.

Net sales were down slightly. However, their net income dropped 93%. Chairman and CEO James A. Rubright stated, "This quarter's results reflect the impact of higher costs of recycled fiber, purchased paperboard, natural gas, chemicals and freight. We had anticipated a decline in folding carton volume due to the closing of our St. Paul facility in January. However, demand for both folding cartons and clay coated recycled paperboard was much weaker than we anticipated. These cost pressures and weak demand more than offset improvements in operations and our intense cost reduction efforts."

After doing much research on the Rock-Tenn Company, it appears they know how to do their job very well and have a good reputation in their industry. Their stock is on the up swing again closing at $12.00 on June 13th. However, can they anticipate their future of higher material costs and learn how to package themselves successfully?

Hollywood's Swap Meet [Fool.com: Motley Fool Take] June 8, 2005

2005-06-13T12:35:00.000-07:00

Hollywood's Swap Meet [Fool.com: Motley Fool Take] June 8, 2005

Gamestop is swapping for profits.

One of our Stock of the Week selections on our companion site, GME, has been swapping games for profits. GME is the biggest retail outlet of computer games. Teens love video games--for a while. When they tire of a couple of old games, the simple solution is to trade them in at GME for another used game or even on a new one.

Since we posted the stock as a Stock of the Week selection, March 15, 2004, the stock is up 63%! USG is up 46% since February 1 and TEAM is up 27% since April 13. For the past several weeks, we have had just too much fun riding the airlines. The airlines were largely responsible for taking our accounts to all time net new highs. Now that these have slowed, it is nice to mention a few of the lessor know stocks that have done well.

The BULL is RUNNING! There is no excitement in the market today but the indexes are inching up. We purchased more FON last week and are enjoying the nice move in our NXTL and FON shares. SRZ

Please visit our Stock of the Weeksite often. We get a chuckle from the constant question of what do we like. We try to post at least one good stock to our Stock of the Week site every week.

We believe:

One should buy good values.
One should own 25 or more stocks.
One should trade infrequently.
One should "weed the garden".
One should avoid high fee brokers.
One should avoid high fee funds.
Stocks are cheap relative to bonds and real estate!

STOCK OF THE WEEK PEAK PERFORMANCE

2005-06-08T12:59:00.000-07:00

Current Value of this Portfolio:

$61.308.03

Simple Return: 18.70%

~~>~>~~>~>~~>~>~~>~>~~

S & P 500 Value : $60,051.47
Simple Return: .39%

~~>~>~~>~>~~>~>~~>~>~~

Treasury Bond Value : $58,540.25
Simple Return: 4.55%

~~>~>~~>~>~~>~>~~>~>~~

As you can see, our STOCK OF THE WEEK portfolio has been outperforming equal investments in the

S & P 500 index and in the TLT Treasury Bond index fund.

Past performance does not guarantee future performance. We make no recommendations!

Please call or write if you have questions about how to make money in stocks, bonds and real estate. You can reach me during office hours at 336-778-0543 or write me

.

STOCKS ARE CHEAP RELATIVE TO BONDS AND REAL ESTATE!

MONEY FLOWS TO THE LOWEST PRICED ASSETS!

BUY THE BIG BULL BOOM BUBBLE!

YOU HAVE TWO TO FOUR YEARS TO MAKE SERIOUS MONEY!

STOCK OF THE WEEK: ROLLING ALONG...NN, INC

2005-06-08T12:34:00.000-07:00

If you were driving through Johnson City, TN and saw NN, Inc. would you know they were a global company employing 1,715 employees?

Their U.S. manufacturing units include the NN Ball & Roller Division which supplies precision steel balls and cylindrical rollers for various applications including bearings, automotive parts, hydraulic motors, oil drilling and mining. Industrial Molding Corporation provides precision injection molded plastic parts for bearings, the automotive industry and a variety of other applications. Delta Rubber Company supplies rubber sealing solutions for bearings, oil drilling and other industries.

NN, Inc.’s European subsidiary, NN Europe, includes a total of five manufacturing facilities within the European Union. They provide precision steel balls, tapered rollers and stamped steel components for various applications including bearings and automotive parts. Their newest subsidiary, NN Asia is under construction now in Kunshan, Jiangsu Province, China. The first products produced will be precision steel balls available by mid-2005.

The primary customers of NN, Inc. include SKF Bearing Industries, FAG Bearings Corporation, SNR Roulements, and the Torrington Company.

NN, Inc. (NNBR) closed on the NASDAQ Exchange June 7th @ $12.91. Their 52 week high come on 12/22/04 @ $13.50 and their low came on 8/9/04 @ $9.40.

February 28th NN, Inc. reported its financial results for 2004. Net sales for the year 2004 were up 20.0% compared to 2003. Read the complete report on their Website but this is what Roderick R. Baty, Chairman and Chief Executive Officer commented, “Although 2004 was a challenging year, operationally, our businesses continued to perform well.” NN, Inc. did face some one time expenses last year resulting in a difficult year from an earnings perspective.

Mr. Baty continued, “We continued to generate solid cash flow and made significant progress in reducing our debt in 2004. As of December 31, 2004, total debt minus cash was $63.9 million compared to $79.5 million at December 31, 2003, a reduction of $15.6 million.”
Mr. Baty, concluded, “Looking forward into 2005, we face both exciting opportunities and challenges. The start-up of our facilities in Slovakia in 2004 and China in the second half of 2005 will provide us opportunities to both better service our worldwide customers and to realize greater operating efficiencies and additional cost reductions.”

NN, Inc. anticipates total year revenues for 2005 to be approximately 11.0% from 2004 levels. Currency accounts for 4.4%, market share improvements 3.6% and price increases associated with raw material pass through 3.0%.

The report also indicates their plans to invest approximately $17.0 million in capital for 2005. This is an increase of $5.0 million from 2004 levels and is a result of their need to fund approximately $8.0 million of capital for the continuing expansion of their Slovakian facility and the start-up of the facility in China. The remaining $9.0 million is related to the ongoing capital requirements of their existing U.S. and European facilities.

To learn more about the anti-friction bearing industry and the global market I went to Anti Friction and found the following information:

World bearings demand to reach $36 billion in 2007
Worldwide demand for bearings is projected to increase more than five percent per annum to $36 billion in 2007. Gains will exceed the 1997- 2002 pace because of accelerating global economic growth, which will stimulate motor vehicle production and fixed investment activity, two major determinants of bearings demand.

Demand in developing regions to spur growth
The most rapid growth in bearings demand is forecast for the developing areas of Asia/Pacific, Latin America, Eastern Europe and Africa/Mideast. Increasing industrialization in these regions will lead to rising OEM output for bearings-consuming products. While these factors will support growth in the developing nations of the Asia/Pacific region, the region also derives a large share of demand from the mature economy of Japan, where gains for bearings are projected to lag the global average.

I think it is pretty cool that NN, Inc., (formally NN Ball Bearings) located in Johnson City, TN had the foresight to think globally. You never know what might be behind a company just by looking at its headquarters’ location.

STOCK PERFORMANCE

2005-06-03T12:31:00.000-07:00

Current Value of this Portfolio:

$61.421.07

Simple Return: 18.92%

~~>~>~~>~>~~>~>~~>~>~~

S & P 500 Value : $56,194.45
Simple Return: .58%

~~>~>~~>~>~~>~>~~>~>~~

Treasury Bond Value : $54,137.78
Simple Return: 4.13%

~~>~>~~>~>~~>~>~~>~>~~

As you can see, our STOCK OF THE WEEK portfolio has been outperforming equal investments in the

S & P 500 index and in the TLT Treasury Bond index fund.

Past performance does not guarantee future performance. We make no recommendations!

Please call or write if you have questions about how to make money in stocks, bonds and real estate. You can reach me during office hours at 336-778-0543 or write me

.

STOCKS ARE CHEAP RELATIVE TO BONDS AND REAL ESTATE!

MONEY FLOWS TO THE LOWEST PRICED ASSETS!

BUY THE BIG BULL BOOM BUBBLE!

YOU HAVE TWO TO FOUR YEARS TO MAKE SERIOUS MONEY!

2005-06-03T12:29:00.000-07:00

STOCK OF THE WEEK: SPARTAN STORES

As the BULL market continues, we will buy stocks with lower betas. Our accounts are currently loaded with high beta stocks. This means that when the market goes up 1% our accounts are likely to go up 2%. The past couple of weeks have been fantastic; our main account is now 12% above our previous all time high! This new all time high does not count new money added but is net total profits.

We will continue to ride the high beta stocks but we will add shares in slower moving industries. If Google is added to the S&P 500 and if it goes berserk on the announcement, we will probably sell half of our position. The removal of Google after the addition of lower beta stocks will mark a significant shift in a conservative direction. Please do not miss-read the above comments. We are bullish. We are buying all the stock we can. We hope Google hits 500 well into next year before we make the shift. Never-the-less, we are planning ahead. Spartan Stores offers good value. It is the kind of stock that you and tuck away during the second half of an economic recovery. It will seem sluggish relative to other stocks but it is like not seeing your 12 year old nephew for a year. He didn't grow much on any particular day but he grew a lot in a year or two.

If you're like most shoppers, you love to save! As a progressive leader in the food distribution industry for 80 years, Spartan Stores, Inc. (NASDAQ: SPTN) SPTN based in Grand Rapids, Michigan, owns and operates 54 supermarkets and 21 deep-discount drugstores in Michigan and Ohio under the Family Fare Supermarkets and Glen’s Markets banners. The Company also supplies 40,000 private label and national brand products to over 330 Independent grocery stores.

Spartan Stores offer great prices every week on quality products for the consumer, including, Internet coupons and on-line specials to help the consumer save time and money.

The 330 business partners of Spartan Stores receive services that accelerate retail growth, productivity and profitability. A sound, working knowledge of retail operations by Spartan associates allows them to offer nearly 100 services which extend beyond the supply and delivery of product and into every aspect of a grocer's operation. Spartan Stores fosters innovation to ensure long term success.

On May 4, 2005, Craig Sturken, Spartan's Chairman, President and CEO announced the fifth consecutive quarter sales growth and fiscal 2005 first quarter net earnings of $1.6 million. Consolidated net sales for the 12-weeks increased 2.5 percent to $474.3 million from $462.6 million in the corresponding 12-week period last year.

Operating earnings improved to $4.9 million compared to an operating loss of $(0.9) million in last year's first quarter. This improvement was driven by sales growth and cost containment.

The Company reiterated its expectation for fiscal 2005 consolidated net sales to improve between 1.0 and 3.0 percent with comparable store sales ranging from flat to an increase of 1.5 percent. Consolidated gross margin as a percentage of sales is expected to be slightly higher than fiscal 2004's level by fiscal 2005 year end. Operating expenses in total and as a percentage of sales are expected to be lower than in fiscal 2004. Spartan’s leadership continues to judiciously invest in the company as fiscal 2005's depreciation expense and capital expenditures are expected to be approximately $23 million each.

What prompted this positive financial result? On January 21, 2004 Spartan Stores, Inc., announced that it has undertaken steps to consolidate its retail grocery store banners to streamline retail operations and establish a stronger, more unified retail store brand identity. The Company changed the name of its Ashcraft's Markets, Great Day Food Centers and Prevo's Family Markets stores to either Family Fare Supermarkets or Glen's Markets. The banner consolidation is expected to create a much stronger retail store brand identity among consumers by building on the existing brand equity of its two most recognized retail store names.

As Spartan places more emphasis on expanded services like in-store pharmacies, fuel centers, bakery and deli counters, they will continue to move in on the “big” guys. Their private label dairy products have also shown favorable results. Developing more robust corporate brands should improve margins.

This stock is in an industry with a healthy number of competitors such as IGA, D & W Food Center and Meijer. Spartan is one of the smaller players. However, since going public in August of 2000, Spartan’s stock has done well. Their 52 week high of $12.90 was on 5/23/05 and their 52 week low of $3.05 on 5/24/04, closing on May 31st at $12.90.

Again, these shares will add a defensive position to your portfolio. The best team is composed of a strong offense and a strong defense. Stocks selling at modest valuations sometimes turn out to be great offensive stocks. Sometimes they are bought by larger players and other times they continue to grow during difficult economic times.

WE ARE GETTING OLD!

2005-05-27T07:01:00.000-07:00

This morning my wife and I received an email that concluded with "I will fear no evil". Of course, we recognized the quote from the 23rd Psalm. However, when we each tried to recite the Psalm from memory we failed. We are getting old!

We opened an NIV study bible to get over the problem verse and we had no problem finishing from there. We each learned the King James version and were struck by the differences in the NIV version. Here is the NIV version:

The Lord is my shepherd. I shall not be in want.
He makes me lie down in green pastures,
he leads me beside quiet waters,
he restores my soul.
He guides me in paths of righteousness
for his name sake.
Even thought I walk
through the valley of the shadow of death,
I will fear no evil,
for you are with me;
your rod and your staff,
they comfort me.

You prepare a table before me
in the presence of my enemies.
You anoint my head with oil;
my cup overflows.
Surely goodness and love will follow me
all the days of my life,
and I will dwell in the house of the Lord
forever.

A little later in the morning, a real estate attorney asked for social security numbers. For the past 33 years I have always been able to recite mine and my wife's. This morning I mixed the two.

I don't know if there is anything I can do about my memory loss. As an investor, it is clear that I should focus more on health care issues. There are 76 million baby boomers. I think it is a chart in one of Harry Dent's books that shows how 55 year old people take 7 times the number of prescription medicine now as did 55 year old people 20 years or so ago.

David Dreman, a Forbes magazine contributor and the author of a series of books about contrarian investment philosophy, has shown that the time to buy an industry is about a year after it goes through a very tough time. I have not checked the dates but the Merck, Pfizer controversy is old news. Pfizer is 20% below its 2002 high. Companies such as UNH, one of my families long-term holdings, has done extremely well during the tough times for the drug makers. In the normal business cycle, drug stocks do well late in the cycle. Investors should at least be looking at drug stocks.

BUY THE BIG BULL BOOM BUBBLE BEFORE YOU ARE TOO OLD TO ENJOY PROFITS!

WRONG WAY RAYMOND JAMES

2005-05-27T06:18:00.000-07:00

This morning on Squawk box, a Raymond James executive who is "bullish" on stocks advises buying the losers; he calls them the flops. It is interesting to see how many ways prognosticators can present the wrong information.

Study after study has shown that when a market turns, one should buy the leadership. Buying the laggards, losers or flops has been a consistently poor strategy. Granted, there are sideways markets where traders do well for a while by buying dips and selling peaks. We are not in a sideways market. The NASDAQ was up 8 days in a row, retreated a little the 9th day and then was up 16 points yesterday.

William O'Neil and others have built stock selection programs almost exclusively around the idea that one should buy leaders. Others, such as James O'Shaugnessy, who have focused on value stock selections still include leadership (relative strength) in their selection techniques.

The stocks on our companion STOCK OF THE WEEK blog have value characteristics and leadership characteristics. We are delighted to help those who ask for assistance in building a diversified portfolio. Readers sometimes write to ask for general stock recommendations. As private individual investors, we cannot make recommendations. We regularly report about stocks we own and about those that we are considering for investment.

Our Stock of the Week blog is an excellent list of stocks. The list has many of the characteristics of successful stocks my family bought 40 or 50 years ago. We believe individuals need to make the final decision about the allocations of their assets. However, managing a portfolio is both art and science. Most investors would do well to seek assistance. However, most investors need to avoid high cost assistance. There are often conflicts of interest involved in the "sale" of securities. Mutual fund fees are often very high. Mutual fund fees may appear to be low but there are often multiple fees and the fees are expressed as a percentage of assets.

Keep in mind, that is easy to do average in the stock market and average in the market will make you rich if you invest modest amounts regularly over 30 or 40 years. It is also important to know that consistently doing one standard deviation better than average is extremely difficult. Furthermore, those that try to hard to do better than average typically take much more risk than average. One can fail miserably when one tries too hard.

The game of golf provides a good analogy. With only a few lessons, one can reach a level of skill that makes the game enjoyable if one is not frustrated that others do so much better. To be a great golfer, one needs superior natural ability and the energy and temperament to try and try again.

To be a good investor, one needs discipline and patience. To be a great investor, one must work and work and work. In all things there are exceptions, perhaps Bobby Jones and John Maynard Keynes illustrate the point. Bobby Jones kept his amateur status because he was busy studying to be a doctor. He played golf for fun. Keynes made great investment decisions from his death bed. He could read the news each morning, make a number of shrewd investments and sleep the rest of the day.

JC Morgan made a negative call on US stocks today. My family is buying all we can.

BUY THE BIG BULL--STOCKS ARE CHEAP RELATIVE TO BONDS, REAL ESTATE AND MONEY MARKET INSTUMENTS!

PORTFOLIO PERFORMANCE

2005-05-27T05:34:00.000-07:00

Current Value of this Portfolio:

$55.346.97

Simple Return: 16.14%

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S & P 500 Value : $52,252.64
Simple Return: .72%

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Treasury Bond Value : $49,306.14
Simple Return: 2.73%

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As you can see, our STOCK OF THE WEEK portfolio has been outperforming equal investments in the

S & P 500 index and in the TLT Treasury Bond index fund.

Past performance does not guarantee future performance. We make no recommendations!

Please call or write if you have questions about how to make money in stocks, bonds and real estate. You can reach me during office hours at 336-778-0543 or write me

.

STOCKS ARE CHEAP RELATIVE TO BONDS AND REAL ESTATE!

MONEY FLOWS TO THE LOWEST PRICED ASSETS!

BUY THE BIG BULL BOOM BUBBLE!

YOU HAVE TWO TO FOUR YEARS TO MAKE SERIOUS MONEY!

TELEFLEX: A STRONG FOUNDATION

2005-05-27T05:33:00.000-07:00

STOCK OF THE WEEK :

Cheap stocks come in all shapes, sizes and industries. This fact makes building a diversified portfolio a joy. It is almost like a good Easter Egg Hunt; some of the best finds take a little more effort but they can be the most rewarding. Investors are hiding from any firm that has anything to do with auto production. Smart investors buy what other investors do not want.

Teleflex Incorporated, Located in Limerick, PA., has designed and manufactured specialty engineered products for more than 60 years. As a leading global supplier to the automotive, marine, industrial, medical and aerospace markets, they are experts in the markets they serve and dedicated to customer service. Teleflex strives to design real-world solutions with products that are practical, cost-effective and reliable. Today, they have revenues exceeding $2 billion, operate in 27 countries, have more than 19,000 employees, and more than 800 patents. Truly a global corporation, Teleflex derives over 40 percent of its revenues from exports and has numerous manufacturing, repair and service facilities in Europe and Asia. Teleflex has a very active international growth program.

Teleflex’s common stock is listed on the NYSE under the symbol TFX The company has increased its cash dividend every year since it began paying dividends in 1977. Jeffrey P. Black, President and CEO of Teleflex recently announced that a cash dividend of ($0.22) per share of common stock would be paid this year. The company offers both a Dividend Reinvestment & Direct Stock Purchase and Sale Plan.

The company is made up of three very different business segments:

Teleflex Aerospace supports commercial and military aircraft, and industrial gas and steam turbines with: comprehensive engineering solutions, in-house design and manufacturing, cargo-handling systems, round-the-clock AOG repairs and spares support.

Teleflex Medical supports health providers along the continuum of care in three main areas: devices for urology, anesthesiology, gastroenterology and respiratory care, surgical instruments and related services and original equipment manufacturers.

Teleflex Commercial business segment consists of three (3) divisions: Teleflex Automotive supplies passenger cars and light trucks with: gearshift mechanisms and knobs, transmission guide controls, electronic throttle control pedals, pedal systems and control cables. Teleflex Industrial product group serves a variety of global industrial markets by designing and manufacturing: gearshift systems, engine and power management controls, light-duty cable systems, fluid handling systems, alternative fuel components and systems. Teleflex Marine cuts through the water as many recreational and commercial boaters depend on them for: mechanical and hydraulic steering systems, throttle and shift controls, marine electronics, engine and drive parts, and marine instrumentation.

The 2005 financial outlook for Teleflex Incorporated, as reported by their President and CEO, Jeffrey P. Black, "From our vantage point today, 2005 looks like it will be a strong year for the company. A focus on cash flow management should increase cash flow from operations by 20 to 25 percent year over year. Cost benefits from the restructuring and divestiture program, accretion from the Hudson Respiratory Care http://www.hudsonrci.com/ acquisition, and the positive impact of portfolio changes in 2004 should improve operating margins across all three business segments. The actions we have taken and our strong balance sheet will enable us to pursue strategic acquisitions in the years ahead." Black added, "In 2005, we will be focused on completing planned divestitures and continuing to execute our announced restructuring program while providing customers with a seamless transition. Fluctuating foreign currency markets, increased corporate costs, and increased tax rates could present some near-term challenges. However, on balance we believe that the benefits of the restructuring program and continued solid core growth will create earnings growth in 2005 and provide a strong foundation for profitable growth in 2006 and beyond."

On Wednesday, May 25th the stock closed at $55.03. Their 52 week high was $56.50 on 5/19/05 and 52 week low was $40.37 on 9/23/04. I thought it was interesting that their stock has split 6 times in the last 27 years. In fact 4 of the 6 times it split in the month of June.

First quarter revenue increased 8% or $626.0 million, compared to $579.7 million for the same period last year. Strong 1st quarter, stock price stock price, restructing well underway and a promising aquisition in the works--what is not to like?

PORTFOLIO PERFORMANCE

2005-05-19T10:10:00.000-07:00

Current Value of this Portfolio:

$46,229.53
Simple Return: 16.49%

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S & P 500 Value : $43,936.57
Simple Return: .01%

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Treasury Bond Value : $41,125.08
Simple Return: 2.82%

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As you can see, overall individual stocks are outperforming the

S & P 500 and Treasury Bonds with great success.

We sold RGX and took a tax loss of $1024. The proceeds were reinvested in this weeks Stock pick: J. Alexander's
BUY THE BIG BULL BOOM BUBBLE!

Past performance does not guarantee future performance. We make no recommendations!

If you want to talk about the market feel free to call me during office hours at 336-778-0543 or write me

J. Alexander's not your Normal Restaurant

2005-05-19T10:06:00.000-07:00

STOCK OF THE WEEK

The oil bubble has popped. Consumers are relieved. After the bills are paid there's a little something left over. It's time to go out to eat.

symbol JAX trades on the American Stock Exchange. The restaurant was formed by three Nashville businessmen in 1971. They operate 27 locations through out Tennessee, Kentucky, Alabama, Florida, Georgia, Louisiana, Ohio, Illinois, Michigan, Kansas, Colorado, and Texas. Jack C. Massey was the company’s principal shareholder, and served as chairman until his death in 1990.

Jack Massey one of the legends in American business, was one of the first health care pioneers founding Hospital Corporation of America (HCA). He is best known in the restaurant industry for his purchase of Kentucky Fried Chicken from Colonel Harland Sanders in 1962. He was chairman of KFC when it listed on the New York stock exchange in 1981. He is the only person to have chaired three companies that listed on the New York Stock Exchange.

Lonnie J. Stout, II is the Company’s current Chairman President and CEO. Under his direction, the company has repositioned all of its assets exclusively into upscale casual dining. The objective is to develop a contemporary American restaurant that focuses on high quality food, outstanding service and great value, but not to rely on gimmicks or themes to be successful. Their concept is an absolute commitment to quality in every aspect of the business. Fresh, high quality, prepared in-house food is the backbone of the concept.

J. Alexander’s differs from most casual dining concepts. The company uses a variety of architectural designs and building finishes to provide its guests with the most attractive environments in the restaurant industry. Original artwork is used as décor accents. J. Alexander’s is not a cookie cutter concept! They are a collection of restaurants dedicated to providing the best dining experience in their segment of the industry. Featuring an interesting array of in-house chef prepared products. Their award-winning menu features hardwood-grilled steaks, baby back ribs, daily fresh seafood selections, soups, burgers and sandwiches.

2005-05-06T11:31:00.000-07:00

May 6, 2005

Current Value of this Portfolio:

$44,812.61
Simple Return: 10.12%

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S & P 500 Value : $43,034.75
Simple Return: -2.04%

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Treasury Bond Value : $40,534.81
Simple Return: 1.35%

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Continental Airlines has done well for the past 3 months in the face of a tough market.

American Airlines, US Gypsum and Gamestop also top our list with 25%,26%, and 29% increases respectively. As you can see, overall individual stocks are outperforming the

S & P 500.
BUY THE BIG BULL BOOM BUBBLE!

Past performance does not guarantee future performance. We make no recommendations!

STOCK OF THE WEEK: MAC-GRAY

2005-05-01T07:56:00.000-07:00

Midnight, musty college dorm basement, dirty laundry, not enough quarters and no empty machines! Sound familiar? I wish Mac-Gray had been around during my college days. Mac-Gray offers payment of laundry through college ID cards, allows one to schedule a machine online and the washer will send an email when the load is done!

Years ago, when one of my high school friends needed spending money, he would asked his Dad for the keys to the apartment laundry. In those days, when a gallon of gas was 27 cents and a burger at McDonald's cost 17 cents (15 cents for fries), the quarters from the laundry came in handy. Years latter, as owners of Myrtle Beach rental condos, Marilyn and I enjoyed hearing the stories about the condo operator who has three basement freezers full of quarters. One owner of a few apartment laundromats used to rent our highest priced condo for multiple summer weeks. There is money to be made in the "coin operated" laundry business.

However, the nature of the business is changing. There are still many "Mom and Pop" competitors but smart companies like Mac-Gray are gradually taking over. By replacing the quarter slots with card readers, these companies are eliminating much of the theft and vandalism that plagued the industry in years gone bye while making price adjustments easy, maximizing profit margins and increasing management efficiency.

Mac-Gray is North America’s premier laundry facilities contractor and a provider of other amenities to the multi-housing industry. Mac-Gray http://www.macgray.com/index.html operates two primary businesses – Laundry Facilities Management and Product Sales. Trading on the NYSE under (TUC) since 1997, the company is the nation’s largest laundry facilities contractor for colleges and universities, operating on approximately 500 campuses.

The founder, H. Stewart Gray, sold Maytag wringer washers door-to-door from the back of his Ford truck. During the Great Depression, when most people could not afford their own appliances, he pioneered the “pay as you use” laundry service by installing coin boxes on washing machines. More about the "new" business later but first lets go over the numbers.

Mac-Gray reported record fourth-quarter revenue of $49.7 million, an increase of 23% from 2003 fourth-quarter. For the year ended December 31, 2004, the company reported record revenue of $182.7 million, an increase of 22% from revenue of $149.7 million for 2003.

"For the full year, our results reflect the combination of both record internal growth and record acquisition-related growth. Our core laundry facilities management business posted a 30% increase to $136.7 million in 2004 versus $104.8 million in 2003. The incremental acquisition revenue in 2004 was $28.3 million, in line with our stated projection of an annual run rate of $29 million, and 89% of the division's increase. The margin contribution also met our expectation, as has our success rate in retaining or renegotiating acquired contracts. The organic growth rate of 3%, or $3.6 million, in the division's revenue reflected a record number of net new contracts placed in service, selective vend price increases, and the conversion of coin-operated accounts to card-operation, which leads to higher revenue.” said Stewart MacDonald, Mac-Gray's chairman and chief executive officer.

"The outlook for Mac-Gray is stronger than at any point in recent history, in light of our 2004 results, our second significant asset acquisition, which closed in January 2005,* and our organic growth momentum. With this recent acquisition, which had 2004 revenue of $69.5 million, we extended our footprint to a national scale, augmented our position as the top provider to the college and university market and enhanced our strong, geographically diversified operating platform. In addition, we gained many more opportunities for leveraging our fixed costs through fill-in acquisitions that would increase our density and profitability in certain targeted markets."
"Additionally, apartment occupancy rates, which are a key driver of machine usage and laundry facilities revenue, improved in 2004 in most of our markets, reversing a three-year downturn. Mac-Gray is well positioned as it continues to lead the industry in technology innovation. Our Intelligent Laundry Systems(TM) product suite, led by LaundryView(TM) and PrecisionWash(TM), continues to increase our visibility in the academic community and differentiate us from the competition” concluded MacDonald.

*January 05 Mac-Gray announced its acquisition of the operations of Web Service Company in 13 western and southern states.

Mac-Gray contracts its laundry rooms under long-term leases on the lessor’s premises for a fixed term, generally 7 to 10 years with an extremely high renewal rate. In exchange for a negotiated portion of the revenue collected. This generates a stable revenue stream and an annuity-like cash flow. Mac-Gray’s laundry facilities business consists of approximately 45,000 multi-housing laundry rooms located in 40 states and the District of Columbia. Their largest competitor is Coinmach Laundry (NASDAQ: WDRY).

Through its MicroFridge® division, Mac-Gray sells its proprietary MicroFridge® line of products, which are combination refrigerators/freezers/microwave ovens utilizing patented Safe Plug™ circuitry. The products are marketed throughout the United States to colleges, the federal government for military housing, hotels and motels, and assisted living facilities. MicroFridge® has also entered into agreements with Maytag Corporation to market Maytag’s Magic Chef®, Amana® and Maytag® lines of home appliances throughout the United States. MicroFridge® products bear the ENERGY STAR® designation.

Mac-Gray enjoys many competitive advantages; one of the most important of which is their innovative use of proprietary technology. In the 1990s, the company introduced Smart Card technology to their industry, giving consumers the largest cashless washer and dryer system in North America. This innovation led to their Intelligent Laundry Systems™ suite of services, which is designed to simplify and modernize doing laundry, both from the point of view of the resident and the property manager or owner. Thousands of people are being notified via computer, cell phone or PDA that their laundry is done, or, for administrators, that service is required. In addition to distinguishing Mac-Gray from its competition, these innovations have created opportunities to enhance their service, reduce their operating expenses and generate incremental revenue for their shareholders.

Their Intelligent Laundry Solutions™ offer amenities to your residents and your property that can bring unparalleled efficiencies to the laundry process.

LaundryView™ is a web-based system that lets residents check the availability of washers and dryers from their PC. They can receive notification via computer, cell phone or PDA when their cycle has completed.

LaundryLinx™ provides property administrators with a direct link to service dispatch via the Internet for faster response time.

TechLinx™ sends service requests directly to the nearest technician’s phone where ever they are via a instant message in seconds.

VentSnake™ a revolutionary technology that cleans more efficiently than brushes and allows cleaning of vents from the outside, while dryers are working.

With the exception of the fourth quarter in 1999, Mac-Gray has been profitable in every quarter of its very long history. The national housing market (estimated to include 3.4 million laundry machines, $2 billion in revenues) is highly fragmented: Mac-Gray and its two largest competitors account for only 1/3 of total laundry facilities management revenues, providing growth and consolidation opportunities. Closing at $ 8.69 on May 2nd (+.13) Mac-Gray’s is changing the way people view their laundry.

Many a old timer from Merrill Lynch will recognize this as a "Jack Fields" stock pick. Jack made his money by buying solid stocks in fragmented industries. His thesis was simple, the high growth glamor stocks are up against other pros. The fragmented industries can grow by gradually taking "Mom and Pop" out of the picture. And please don't cry for "Mom and Pop", they sell to Mac-Gray because the price is right.

Soon you will be able to go onto a Google map on your cell phone, find a Mac-Gray machine and schedule it for use, wherever you happen to be. Technology is helping improve our lives and Mac-Gray has taken advantage of technology to help customers and shareholders.

Important Note: The writers of this blog are amateurs. We invest and write for personal enjoyment. We do not recommend stocks. We offer free consultation but you must be responsible for your own investment decisions!

Philosophy: if you buy a carefully selected and diversified portfolio of common stocks, keep the costs low by avoiding mutual funds and high priced brokerage accounts, trade infrequently and take advantage of tax breaks, you are likely to beat the returns of 90% of all other investors!

STOCK OF THE WEEK: RUSSELL

2005-04-27T07:51:00.000-07:00

My family has owned Reebok (RBK) since 1985. The stock has done well and we are in no hurry to sell. However "well" is a relative term.

During the time we owned RBK it has increased in value by 1,100%. When we bought the stock, it looked like a value relative to Nike (NKE); it still does. During the time that we made 1,100%, NKE went up 7,600%! RBK pays a slightly larger dividend than NKE and this dividend is in addition to the capital appreciation. Jeremy Siegel makes the case that dividends add more to the total return than one would think but I doubt that the small dividend difference in these companies is enough to worry over. One lesson to take away is that generally it is best to buy the industry leader.

"Well" really is a relative term. Had we purchased Russell Corp. (RML) on January 2, 1985, our capital capital appreciation would have been 17%; not 17% per year but 17% total since 1985.

Comparing a "t-shirt" maker to Nike is unfair; calling Russell a "t-shirt" maker is unfair; but remember one of our themes is to buy stocks that are "under-loved". We now know that Nike is one of the most successful brands ever. Russell makes quality products and survived a very difficult 20 years in the apparel industry. The comparison of the three companies, shows that investing is an art. Buying good value is always the right approach, but value is a reflection of growth potential, management skill and many other factors.

The following report is about a solid company. A company that is probably a better company than is commonly thought. It does not have the panache of Nike but it is a cheap stock by several measures and we have made it our Stock of the Week.

Russell Corporation has the products to meet the needs of the serious athlete, the weekend warrior and everyone in between. Founded in 1902, The Russell Corporation located in Atlanta, GA. runs every step of the manufacturing process, from weaving raw fibers into fabric to dyeing, cutting, and sewing. RML designs, manufactures and markets a variety of apparel products. These products include fleece, t-shirts, casual shirts, jackets, athletic shorts, socks and camouflage attire for men, women, boys and girls. With eleven brands, Russell Corporation has something for everyone.

The Russell Athletic division is the world's largest supplier of team uniforms and is the Official Uniform Supplier to 14 Major League Baseball(R) teams, Little League Baseball(R), and USA Baseball(TM). Russell outfits over 200 NCAA(R) Division I college teams and is an Official Sponsor of the Women's Basketball Coaches Association (WBCA), the American Baseball Coaches Association (ABCA), and the National Fastpitch Coaches Association (NFCA). Russell apparel can be found in a variety of department stores and sports specialty retailers nationwide.

The JERZEES division is a major supplier of fleecewear and T-shirts to retailers and screen printers. Russell purchased SHC's sporting goods business (Spalding and all other non-golf brands) in May 2003.

The company holds a firm commitment to a very simple philosophy, "do the right things for the right reasons." In today's competitive global marketplace, Russell feels its greatest strength is its people. It employees 14,400.

Russell Corporation supports non-profit organizations with product donations, cash contributions and employee volunteer hours. The company focuses its efforts on programs, projects and activities that benefit the communities where its employees live and work. By working hand-in-hand with the local communities, Russell strives to make a difference in the towns and cities around the world that its employees call home.

Over the last two years, Russell has made the following acquisitions:
* December, 04 acquired Brooke Sports
* July, 04 acquired Huffy Sports
* April, 03 acquired Spalding
* Jan, 03 acquired Bike Athletic

On February 23, 2005 Russell Corporation reported fiscal 2004 fourth quarter sales of $334.0 million, an increase of 10.5% over the same period a year ago; 9.4% for the year. Sales for the quarter ended January 1, 2005, reflect a 3% increase in the Company's ongoing businesses in addition to approximately $22 million dollars in incremental sales from acquisitions owned for less than a year. Sales gains were again recorded for the Activewear Group, the Athletic Group and the International apparel segment.

"During the fourth quarter, sales increases in our domestic segment were led by our Athletic Group. Increases in Athletic were driven by our recent acquisitions, which have solidified and grown our position as a leading branded athletic and sporting goods company. Our International apparel segment continued its sales growth pace, with increases of more than 20% for the quarter and the year," said Jack Ward, chairman and chief executive officer. "For the quarter, our Activewear Group had a 3% increase in revenues, led by our JERZEES(R) sports apparel in the mass channel."

For the full year ending January 1, 2005, net sales increased $112 million to $1.298 billion, a 9.4% increase over the prior year's sales of $1.186 billion.

Those of you who are familiar with Jack Ward, know a fierce competitor. Back in the days when he was at Sara Lee, there was no one in Winston-Salem who garnered more respect. I lost track of Jack some years ago but seeing the number of acquisitions made by Russell in recent years and then reading Jack's name as CEO was a revelation. It made the idea of buying this historically slow growing stock a no brainer.

Russell expects sales for fiscal 2005 to increase approximately 15% to 17%, to approximately $1.50 billion to $1.52 billion.

The 52-wk high (12/28/2004) is $ 19.78 and 52-wk low (5/18/2004) is $ 15.60. The closing on April 27th was $17.70.

We hope you are a disciplined investor. One who diversifies into 12 to 20 stocks, who trades infrequently, who makes his own decisions, who lets winners run and cuts losers short and one who keeps commissions low. AS ALWAYS, WE MAKE NO RECOMMENDATIONS. INVEST AT YOUR OWN RISK!

STOCK OF THE WEEK: Weider

2005-04-25T07:32:00.000-07:00

click here for more information on Weider Nutrition International

Without the necessary vitamins, minerals, and nutrients our bodies fall into a degenerative state, known as aging. You need the necessary amino acids, minerals, proteins, and vitamins to revitalize proper cell regeneration and without them, the body falls faster into disrepair. A little over fifty years ago, Denham Harman, a researcher at the University of California at Berkeley, realized one reason why people get old. Free radicals, molecules that can attack cells, are responsible. He theorized that substances found in our bodies and in food called antioxidants might just slow the damage.

Harman's free radical theory of aging was initially greeted with a mix of apathy and criticism. Industrial chemists had long known about free radical reactions--for example, free radicals make iron rust--but most scientists had doubted that they occurred in living creatures. That was then; this is now. Nutrition.

Today, thousands of studies have corroborated Harman's theory. "Antioxidant" has become a household word, and, according to the Nutrition Business Journal, Americans spend billions of dollars on antioxidants each year. Antioxidants can reduce your risk of heart disease, cancer, and Alzheimer's. They might even increase your life span.

While research shows that exercise and a nutritionally balanced diet can help improve our health, it also shows that our food supply is not what it used to be. Commercial practices such as over-harvesting are thought to contribute to the problem. The considerable evidence shows that supplements can help.

The Nutrition Industry facts reported sales of $63 billion dollars just 2 years ago and they project a steady climb in growth over the next 5 years.

Weider Nutrition International (WNI), located in Salt Lake City, UT develops, manufactures, markets, distributes and sells branded and private label vitamins, nutritional supplements and sports nutrition products. Weider distributes its products to over 60,000 retail locations. Using health food stores, drug stores, supermarkets, gyms and mass volume retailers like Costco and Wal-Mart, which account for about 50% of their sales. Their portfolio of recognized US brands include Schiff®, Weider Sports Nutrition, and Tiger's Milk® Protein Bars.

The Group is organized into three business units: The Schiff Specialty Unit which markets a complete line of specialty supplements, vitamins, and minerals under the Schiff brand as well as private label products. The Active Nutrition Unit develops and markets sports nutrition, nutritional bar and weight management products primarily under Weider and Tiger's Milk brands. Tiger's Milk, introduced in the 1960s, is known as America's first nutrition bar. Last but not least, another division called Haleko develops, manufactures, and markets nutrition products primarily under the Multipower and Multaben brands. Weider operates in the United States, Germany and South America.

History:Joe Weider is credited as the founder of the Sports Nutrition Industry in 1940. The company has a rich history as a leader in the nutritional supplements industry. Weider Nutrition began as the nutritional products division of Weider Health and Fitness. In 1989, Weider Health and Fitness established its three principal business divisions (Sporting Goods, Nutrition and Publications) as independent subsidiaries. The 418,000 square foot Salt Lake City manufacturing facility, opened in 1997, provides Weider with the capacity to quadruple its current annualized sales. In June 1999, Bruce Wood joined Weider as President and Chief Executive Officer. Mr. Wood brings over 25 years of food industry experience, primarily with divisions of Nabisco, Inc.

The Weider Group feels the key to the long-term growth has been the success of core brands. Weider is focused on supporting and building the strongest brands and developing and marketing high quality, innovative new products that meet consumer needs and demands.

As part of brand building and product development efforts Weider announced the sale of certain assets of its Active Nutrition Unit to Weider Global Nutrition, on April 1, 2005. A wholly owned subsidiary of Weider Health, a privately held company in California and the majority stockholder of the company. Bruce Wood, president and CEO, stated, “The sale of the Weider branded business enables us to focus on our core businesses: the Schiff Nutritional Supplements Brand and the Germany based Haleko business.”

Weider knows that anticipating and meeting customer needs is critical. The company has a track record of developing first-to-market products. To continue to seize these opportunities, the R&D and marketing teams are working closely together to develop and carefully test highly-targeted products. Each new product has anticipated measurable return on investment goals.

On November 11, 2004 The Schiff Group introduced a new joint care supplement called Lubriflex3™ that provides fast-acting joint comfort and promotes better joint health. The product’s triple action formula combines Uniflex™, Lubriflex a powerful antioxidant that protects cartilage and joints, with Joint Fluid, a compound that helps joints glide easily and smoothly, and Glucosamine, an ingredient well-known for supporting joint cartilage and maintaining healthy joint function. The net result is a faster-acting supplement that can provide improved flexibility and joint function in just a few days.

By adding Uniflex™ and Joint Fluid to Glucosamine, Schiff® is breaking new ground in the supplement industry. Emerging results from an ongoing study show that in the very first week of use Schiff® Lubriflex3™ was dramatically more effective than Glucosamine alone in improving overall joint function. In fact, 83% percent of users reported that they experienced improved joint comfort. 78% said that they could even function better during daily activities and 72% showed improvement in physical functioning scores.

“The wonderful thing about Lubriflex3™ is that it can do what traditional pain relievers don’t by addressing the root cause of the joint discomfort,” said Luke Bucci, Ph.D., vice president of research for Schiff®. “Glucosamine has earned its reputation as a truly effective supplement when it comes to building joint cartilage. By adding the comforting properties of Uniflex™ and the protective actions of Joint Fluid lubrication to the equation, we’ve found a powerful, faster way to provide joint comfort.” Suggested retail price of $22.99-$25.99 for a 60-count package.

The stock traded at its 52 week high ($7.15) on April 4th, 11 days ago. The stock is currently trading at $4.20 (written on April 22). We remind you that Jack and I are amateur investors and do not recommend stocks for purchase. We enjoy researching these stocks for our own pleasure and the benefit of our families.

Reporting a loss in 3rd quarter sales over the same period last year hurt the stock. Bruce Wood explained it this way, “We experienced a modest decrease in third quarter sales over the year-ago period. The reduction is primarily a function of a decline in domestic private label sales, as well as weakness in our Haleko business unit’s. We also experienced a reduction in our gross margin and operating margin percentages. Operating results were negatively impacted by volatile raw material costs in our joint care business, increased marketing spending in support of new products, and disappointing Haleko branded sales.” He goes on to say that he expects higher raw material costs and a challenging competitive environment in Germany to continue. “Nevertheless, we remain committed to a long-term strategy of strengthening our brands in what continues to be a very competitive and compressed margin marketplace, and our strong balance sheet provides us with resources to support this strategy.”

Thankfully, I have not had to use their Joint Care Supplement yet, but after my research and 777,000 hits from my internet on sites that recognized their name, I realize they are one of the most trusted and respected brands due to their focus on research, innovations and delivery of high quality supplements. They emphasize the use of the finest natural ingredients to ensure that its products meet strict standards for labeled potency, purity and stability.

They know growth relies upon sales and sales upon quality product and superior distribution. They have always perceived their customer relationships as huge resources and growth contributors so they will continue to model successful marketing programs to enhance communications and responsiveness to relationships with greater potential.

Bottom Line- Weider Nutrition International is a company worth watching. I keep getting older every day. Can vitamins help me regain my youthful look? You decide.

Comment from Jack: my sister and my basketball team member swears by the combination of Glucosamine and other ingredients. My sister's doctor says that many a joint replacement surgery could be avoided by the regular use of these products. There is also evidence that bone desease is attacking men almost to the degree of women. There are 55 million baby boomers in America. We look for long-term buys and this good be another good one.

STOCK OF THE WEEK: TEAM

2005-04-13T09:13:00.000-07:00

TechTeam Global,Inc(TEAM) has been a global provider of Information Technology (IT) and Business Process Outsourcing Support Services (BPOS) to Fortune 1000 corporations, government agencies, and service organizations for over 25 years. Their global locations in the United States, the United Kingdom, Sweden, Germany, Brussels, Romania, and through their wholly owned subsidiaries Digital Support Corporation, TechTeam A.N.E., and TechTeam Cyntergy allow them to continue their commitment of expanding into new markets, delivering new services, and reaching more locations to better serve their global clientele.

TechTeam’s ability to integrate computer services into a flexible-tailored, total single-point-of-contact (SPOC) solution is a key element of its success. Partnerships with some of the world’s "best-in-class" corporations, including automotive, consumer, pharmaceutical, hospitality, insurance, financial services, manufacturing, government, and education provide TechTeam with unparalleled experience and expertise in providing the following IT support solutions: Help Desk / Contact Center Services, Technical Staffing, Professional Services / Systems Integration, Training Programs.

Their mission is to provide develop their approximately 2,000 employees and improve TechTeam’s services in order to deliver results that exceed their customers’ expectations while achieving superior returns for their shareholders.

TechTeam was founded in 1979 in Detroit, Michigan as a value-added reseller and computer training company. As they grew, they added new services, including telephone technical support for Ford Motor Company. Today, headquartered in Southfield, MI, they have over 25 years of experience serving their flagship customer, in addition to serving global companies in business-to-enterprise, business-to-business, and business-to-consumer markets.

At TechTeam Global the employees speak 25+ languages, offering complete multilingual support 24x7. While their customers are in different markets, located in multiple countries, and have varying needs, (TEAM) continues to delivered exceptional services at cost-effective prices that help them reach their business goals.

2004 was a good year for TechTeam ., with record earnings of $.49 Per Share; $.16 Per Share for Fourth Quarter 2004. Today TEAM stock is trading at $11.33. Its 52 week range went from $6.63 on April 22, 2004 to $12.00 on March 8, 2005.

Thus far, 2005 has proven to be a good year for TechTeam. In April Digital Support Corporation (DSC), a wholly owned subsidiary of TEAM, Inc. announced its contract with The United States Air National Guard (ANG) www.ang.af.mil/ has been renewed for 4 1/2 years (6 months’ base period, with 4- 1-year renewal options). If all renewal options are exercised by the ANG, the contract is expected to generate approximately $55 million in revenue. “We are much honored to have been selected to deliver this critical technical support to the Air National Guard,” stated Peter S. Brigham, president and chief executive officer of DSC. “We have been providing support to the ANG since 1998, and this award is an affirmation of the superior work performed by our team, which is distributed over the United States and its territories. As part of TechTeam Global, we remain focused on offering the best value proposition to our customers: exceptional quality, low cost, flexibility and outstanding customer satisfaction.”

March delivered TechTeam a contract with Galaxy Hotel Systems to implement software and deliver training for up to 350 Starwood Hotels. The value of this contract to Team has the potential to reach $2 million in 2005 depending on factors such as the actual deployment and rollout timing. “We required an experienced, skilled technical team to work side-by-side with our IT staff on this complex and mission-critical project,” stated Dan Hogan, Vice President and General Manager of Galaxy Hotel Systems. “With TechTeam'strainers, technology specialists, and coordinators, we are confident that we will be able to achieve our aggressive deployment schedule. They have a proven track-record that we needed to ensure the successful delivery of our solution and they are already exceeding my expectations.”

Tech Team's expertise with information technology and software deployments, combined with our experience serving the hospitality industry, makes this a good fit for both companies,” stated William F. Coyro, Jr., President and Chief Executive Officer of Tech Team's. “We are pleased that Galaxy Hotel Systems, a quality-focused company, has chosen TechTeam’s technology specialists and trainers to partner with them on this important project.”

In January Tech Team'sannounced the acquisition of Sytel, Inc. a diversified IT services and solutions company headquartered in Bethesda, Maryland. This acquisition will further enlarge Tech Team'sprofessional services and systems integration business segment and greatly expand the Company’s government technology systems presence in North America.

I like companies who give back to their community. Tech Team's and their customer Ford Motor Company work with Focus: HOPE, a nationally recognized civil and human rights organization based in Detroit that views education and training as the keys to ending racism and poverty. Its Information Technologies Center provides certified training in network administration as well as desktop and server administration. Together, they have developed a customized program for students who are eligible to be hired by TechTeam to work on the Ford help desk upon graduation. More than 50 people have graduated from this program.

Information Technology (IT) has become the driver for business success. It is vital that the systems work as promised and the business users have reliable support so that their workers can get back to their core business. My research indicates that Tech Team with its roots in technology is a leader in delivering a complete IT service with end-to-end support solution for its global customers! Tech Teamoffers a balance between cost and quality. A balance that seems to appeal to their vendors.

STOCK OF THE WEEK: US Gypsum

2005-04-05T07:19:00.000-07:00

Press Release February 2005: Innovative New SECUROCK Brand Roof Board From USG Offers Exceptional Bond Strength and Other Benefits; Experts Confirm New Product Can Enhance Roof Membrane's Performance.

United States Gypsum Company (NYSE: USG) http://www.usg.com/ a leader in building products announced in February the introduction of SECUROCK(TM) http://www.usg.com/securock Brand Roof Board, a distinctive new roof cover board option for low-slope commercial roofing applications. The product's advanced fiber-reinforced technology provides architects, designers, building owners and roofing contractors numerous products with superior performance benefits compared to traditional fiberglass roof boards, whose face layers can de-laminate over time and generate contractor callbacks. Easy to install and handle, the roof board provides outstanding wind uplift performance, fire performance, moisture and mold resistance and versatility.

SECUROCK Roof Board offers architects, designers, building owners, roofing contractors and other construction professionals numerous product and installation advantages - all of which can contribute to a roof's long-term performance.

"Our tests confirm that SECUROCK Roof Board actually enhances bond strength, while providing excellent durability, wind uplift resistance and versatility," said Colin Murphy, president of Exterior Research and Design, http://www.exdesign.com a prominent Seattle consulting firm that conducts forensic analysis, design and testing of building envelope components and systems. "We're also finding that the roof board's unique gypsum fiber technology and uniform composition make it much less likely to de-laminate, which can be an issue with competitive products."

The new product line is Eco-friendly and has earned the "Green Cross" certificate from Scientific Certification Systems (SCS), http://www.scscertified.com/ the nation's leading national testing company that evaluates manufacturers' environmental claims. In addition, the panels are an excellent option in LEED (Leadership in Energy and Environmental Design) hhtp:/www.usgbc.org/LEED/ Green Building Rating System(TM) applications.

For more than 100 years, Chicago-based United States Gypsum Company has been a leader in producing innovative products and systems to build the environments in which we live, work and play. As the inventor of wallboard and ceiling tile, USG created North America's building materials industry. Their products are used in everything from major commercial developments and residential housing to simple home improvement projects. Their flagship brands include SHEETROCK® Brand gypsum panels and DUROCK® Brand cement board, which are recognized around the world.

USG is the world's leading producer of gypsum wallboard, joint compound and a vast array of related products for the construction and remodeling industries. They are also the global leader in the manufacture of ceiling suspension systems and are recognized as the premier acoustical panel and specialty ceiling systems innovator. Their family of products provides creative building solutions that set new standards for productivity and efficiency, helping contractors and architects deliver high quality and innovative designs.

USG, through its subsidiary L&W Supply, is also the nation's largest distributor of drywall and related building products. L&W serves the professional contractor through a network of nearly 200 locations and strives to be their preferred source for all quality products and services they need to complete their projects on time and on budget.

Some 14,000 employees working in more than 30 countries are dedicated to helping their customers and partners achieve success. They strive to reach the highest levels of customer satisfaction and quality in everything they do. Their steadfast commitment to the company's core business beliefs-integrity, safety, performance, quality, diversity, innovation and service-have helped them become the $3 billion Fortune 500 company they are today.

How did they get started?
One hundred years ago, the gypsum business in North America was fragmented into regional markets. Then, in 1902, 30 independent gypsum rock and plaster manufacturing companies merged to form the United States Gypsum Company, consolidating their resources across the continent. The following year, United States Gypsum Company developed its first building product, Pyrobar, a gypsum-based, fireproof tile. The next step toward the wallboard we know today was the invention of Sackett Board, a panel made of multiple layers of plaster and paper. United States Gypsum Company purchased the Sackett Plaster Board Company in 1909, entering the gypsum board market.

The early 1980’s brought recession and devastated USG's bottom line which led to a restructuring of the company. In 1984, USG Corporation was formed as a holding company–a reverse merger in which United States Gypsum Company became one of just nine operating subsidiaries. Through a renewed commitment to research and development and acquisition, USG continued to expand into and lead new markets. DUROCK Cement Board offered new water construction solutions. And the acquisition of DONN Incorporated and its ceiling suspension systems positioned USG Interiors as the only company to offer complete pre-designed and fully integrated ceiling systems.

The early 1990's saw a return to a solid bottom line and continued innovation. A new headquarters building and the USG Interiors Solutions Center, both in downtown Chicago, showcased USG products and innovations. In the late 1990s, USG developed a new gypsum/cellulose product family called FIBEROCK Brand Panels.

What’s Ahead?
By the year 2010, according to some industry experts, significantly more new residential construction will be factory-built. The steadily increasing use of manufactured, modular, and panelized homes means both new challenges and new opportunities for builders. Pinnacle Building Systems of Bristol, Indiana, uses UPG products. Vice President of Manufacturing Pat O’Brien is enthusiastic about both the quality of SHEETROCK Brand Paper Faced Metal Bead and Trim and the service provided by United States Gypsum Company. “We sent one home all the way to Wyoming,” he notes, “and there was only one crack.” He also says that follow-up and monitoring are as important as the quality of the bead. “USG didn’t just sell us the product and walk away,” says O’Brien. “They’ve been there whenever we’ve needed them.”

As USG enters the 21st Century, new markets and opportunities present themselves for expansion and innovation. With the future being shaped by the Internet and e-commerce, new partnerships, and emerging markets, USG goal is to continue to grow and lead the building materials industry. USG maintains one of the largest research and development efforts in the building industry today. The firms laboratory facility (located in the Chicago suburb of Libertyville, IL) is staffed by over 140 employees who bring a wide variety of skills to the task of developing and improving building materials and processes.

It was very interesting touring USG's web site. The renovations and/or new construction USG has been involved in were fascinating. The 105 year old Texas State Capital buildings renovation, the Navy’s new boot camp in Illinois, the 20,000 multifunctional Kiel Center, home of the St. Louis Blues hockey team and my favorite- new schools in South Haven, MS saving money by using abuse-resistant wall panels from USG instead of expensive masonry.

How do you Advertise USG products? NASCAR of course
The 2005 season proves to be an exciting year for USG Racing. USG has joined the #17 DEWALT and Roush Racing team with 2003 NASCAR NEXTEL Cup Series Champion Matt Kenseth behind the wheel. "USG's new NASCAR team program is an alliance of champions," said Julian Francis, Vice President, Marketing, USG Building Systems. "We're affiliated with a championship driver in Matt Kenseth, a championship team in DEWALT Racing, a championship organization in Roush Racing and a championship motor sports sanctioning body in NASCAR. It is only fitting that USG SHEETROCK®, a championship brand in the building industry, has positioned itself with a strategic alliance to target our customers. This is an exciting time for USG Racing and we're looking forward to a thrilling 2005 season."

Financial Outlook
The only loose “board” I could fine in the USG Corporation is when they filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code on June 25, 2001. This action was taken to resolve asbestos claims in a fair and equitable manner, protect the long-term value of the businesses and maintain their market leadership positions.

USG had a 52 week low on 5/10/04 @ $12.30 and a 52 week high on 12/30/04 @ $41.67. Today it trades at $32.11 On February 1, 2005 USG Corporation reported fourth quarter 2004 net sales of $1.2 billion and net earnings of $85 million. Net sales and net earnings increased $242 million and $39 million, respectively, compared with the fourth quarter last year.

As usual the best stock market buys are hard to buy; good buys often have serious flaws. Although the asbestos problem has been around for a long time it is still a present danger. Johns Manville, Owens Corning, Halliburton and many other companies have been damaged by the potential of virtually unlimited law suits.

Bill Frist, Senate Majority Leader, has openly stated that he will get a bill through to "solve" the asbestos problem. Companies such as USG will pay dearly under the planned bill but the good result will be a cap on total liability. It is time for America to get past the drag on our economy created by excessive liability awards. The system has gradually moved to one in which the lawyers get the most benefit, the companies pay dearly and the few who were harmed the worst are lucky to win multi-million dollar awards. All the while, thousands of others who were injured settle for small sums or die before any global solution is found.

Many folks are afraid of the asbestos issue and the possibility that the housing boom is about to bust. The good news for USG is that baby boomers and echo boomers are still buying homes at the same time that industrial building is picking up. The roof panels mentioned in the press release are used in industrial applications. Buy USG as one of a portfolio of 15 stocks or more and sleep well. We will add this stock to our STOCK OF THE WEEK portfolio at tomorrow's opening price.

STOCK OF THE WEEK: RGX Imaging

2005-04-02T06:59:00.000-08:00

Chances are you or someone you know has had to have an X-ray, MIR, CT or Ultrasound recently. If you have active children you have probably experienced this thrill too often. Recently, I discovered an 8-year old company in a growth business that fits our "good value" screening criteria. It is a company that is living up to its commitment to provide high quality, cost effective radiology services. Company literature says that Radiologix (RGX) strives to be the premier provider of diagnostic imaging services through high-quality service to patients, referring physicians and mutually beneficial relationships with radiologists who provide expert interpretations of diagnostic images. Through the commitment of valued employees, Radiologix is dedicated to growing shareholder value by delivering personalized, timely and cost-effective services to patients, affiliated physicians, referring physicians, and the health care community.

In November 1997, seven successful, geographically diverse, physician-owned radiology practices joined together to form what is now known as Radiologix. (http://www.radiologix.com/). Each of these physicians contributed their imaging center and administrative assets in exchange for ownership in the Company. The Corporate Office and National Support Center is based in Dallas, TX and provides functional support to the subsidiaries.

Today, Radiologix owns and operates 76 freestanding, outpatient diagnostic imaging centers. The centers employ 2,000 and provide a broad range of diagnostic imaging services in 10 states. The company maintains a strong presence in all of its markets. Thanks to the efforts of their family of employees and member physicians, Radiologix has become one of the leading providers of radiology services in the United States. The company utilizes technology and technical expertise to perform a range of imaging procedures, such as magnetic resonance imaging (MRI), computed tomography (CT), positron emission tomography (PET), nuclear medicine, ultrasound, mammography, bone densitometry, general radiology and fluoroscopy.

Radiologix’s mission statement is to offer the benefits of small, family type practices, combined with the structure, security and funding of a publicly traded corporation. The radiologist partners work closely with the staff to ensure the highest possible patient care. Management feels it is important to kept the family feeling in the centers while providing "best in class" radiology services.

We have often noted the aging of the "baby boomers". Data show remarkable growth in the number of doctor visits in the USA. US citizens who have reached 51 years of age are taking 7 times the number of prescriptions as they were taking 10 years ago. Health Care is a growth business. Employment for radio-logic technologists is expected to grow most rapidly in offices and clinics of physicians, including diagnostic imaging centers. Health facilities such as Radiologix are expected to grow very rapidly due to the strong shift toward outpatient care, encouraged by third-party payers and made possible by technological advances that permit more procedures to be performed outside the hospital.

Fiscal year end results did not fully reflect the successful year Radiologix had. "2004 was a watershed year for our company. We focused our efforts on stabilizing our operations, building our leadership team, and strengthening our internal controls. As such, we made many difficult operational, financial and personnel decisions that resulted in significant but primarily non-cash financial charges. These decisions challenged our team, tested our resolve, and blurred our true underlying performance," said Sami S. Abbasi, president and chief executive officer of Radiologix. "However, by making these decisions and acting on them, we left 2004 stronger, healthier financially, and better positioned for the future. I am confident in our operations and in our potential to create long-term sustainable shareholder value."

Radiologix’s largest competitors, Alliance Imaging, (AIQ) (http://www.allianceimaging.com/) founded in 1983 has 478 diagnostic imaging systems with over 1,000 clients in 43 states. This stock was volatile during the year. The 52 week low of $3.60 was made on 3-29-04 and the 52 week high of $14.15 was hit 2-1-05, Alliance reported an increase in fourth quarter revenue of 5.5%. Revenue for 2004 increased 4.0%.

Per the Center for Disease Control, (www.cdc.gov/), emergency department visits are on the increase. Two factors are involved: overall population growth and the aging of our population. Older Americans, those 75 years of age and over, had the highest rate of emergency department visits-65 visits per 100 persons per year while the national average was 39 visits per 100 persons per year. You or your family member will likely use diagnostic and imaging services in any 5 year time.

The recent roller coaster ride may have be contributing to the cheapness of the stock. Radiologix’s 52 week high of $4.98 on 2-4-04 and 52 week low of $2.99 on 10-24-04 is too exciting for conservative investors. However, patient investors should be well rewarded by the stock. With a price now of $4.29 per share, are you willing to take a chance on this 8 year old diagnostic imaging company?

Stock of the Week: GameStop

2005-03-15T06:53:00.000-08:00

STOCK OF THE WEEK GME 19.95 PER SHARE

GameStop Corp. (NYSE:GME) located in Grapevine, TX is the nation's largest video game and entertainment software specialty retailer. GameStop sells the most popular new software, hardware and game accessories for the PC and next generation video game systems from Sony ,Nintendo, and Microsoft. GameStop is the industry's largest reseller of used video games.

In addition, the company sells computer and video game magazines, strategy guides, action figures, and related merchandise to more than 30 million customers. The company operates 1,746 retail stores throughout 49 states, Puerto Rico and Ireland, primarily under the GameStop brand. The stores are located within shopping malls and strip centers. Complementing the retail stores, the company operates a website at www.gamestop.com and publishes Game Informer, one of the industry’s largest circulation multi-platform video game magazines, with over 1,500,000 subscribers. One visit to the web site is all it takes to appreciate the extent of the offerings available.

Since going public in Feb 12, 2002, GameStop has had an impressive showing over the last couple of years. Sales have exceeded projections each quarter. On Nov. 21, 2002 GameStop Corp. announced the opening of its 1,200th retail store. "While reaching 1,200 stores is an exciting milestone for GameStop, it is also just a step on the way to the continued rapid expansion of our company," said R. Richard Fontaine, Chairman & CEO. "We are on pace to open over 200 stores this year; and, given the growth of the video game business, and the success we have had serving very diverse demographics, we plan to grow even faster in the coming years."

Third Quarter 2004 was no exception. GameStop sales increased 28% to $416.7 million from $326.0 million. Video game software sales were exceptionally strong, growing 36%, with leading titles such as "Madden NFL 2005" from Electronic Arts Inc, "Grand Theft Auto: San Andreas" from Take-Two, and "Fable" from Microsoft, Inc. Video game hardware sales were robust with the launch of the newly redesigned PSTwo and the Xbox holiday bundle. Comparable store sales increased a strong 11.8% during the quarter.

On November 9th 2004, GameStop set a one days sales record when Microsoft released "Halo 2". "Halo 2" sold over 525,000 units in 24 hours. "Our initial projections for a strong holiday season seem to be justified by the exceptional acceptance of the video games released thus far in the season, and we are looking forward to an exciting few months and beyond", reported CEO Fontaine. Here is the BUT.

Depending on others for success can cause one to ask, "Why Do Bad Things Happen to Good Companies?" December sales were ready to surge but didn't. The headlines read- Hardware Shortage Impact Fourth Quarter Sales and Earnings.

Mr. Fontaine, commented, "After a very strong November, when GameStop's comparable store sales rose 23% driven by significant demand across all major platforms, we were well positioned for a strong holiday season. Unfortunately, severe hardware shortages of Sony's PlayStation 2, Microsoft's Xbox, and Nintendo's Dual Screen, have taken a toll. Not only did we lose the tie-in software sales that generally accompany hardware gifts, but due to the shortage affecting the total market, we lost the 'downstream' sales that historically have come our way regardless of where hardware is sold. In all of my years in the video game business, I have never seen shortages of this duration or magnitude. There is no question that there was demand for the product, but not hardware product to satisfy demand. As the season progressed, we expected hardware inventories to improve, and, as the season developed very late, we felt that much of the lost holiday sales could be rescued with more hardware in the last weeks of the season, but the shipments did not materialize."

He also said, "To put into perspective the impact of not being able to secure the hardware we needed, our December month-end inventory was $33 million lower than the previous year even though we had over 300 added stores. It became very clear as the month went on, and hardware shortages continued, that there was a significant effect on store traffic”.

"While we were frustrated by the supply shortfall, we view this as a temporary problem, as we know that our hardware manufacturers will aggressively work to expand the user base that is so obviously ready to purchase the product. Our disappointment at not having the product to sell is, to some degree, tempered by our enthusiasm for the fact that in the fourth and fifth holiday season for Xbox and PlayStation2, demand was phenomenal".

GameStop's numbers are sensational. The company has grown from 1,039 stores in 2002 to 1,746 stores; an increase of 707 stores in 2 ½ years. The industry is growing, the company is growing, but the supply problem zapped fourth quarter reults. The business is competiive with “big boys" such as Wal-Mart offering price pressur. The company does not pay a dividend.
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Selecting this company as the Stock of the Week, takes Moxie. (As the saying goes, a lot of Moxie). Selecting a company whose largest competitor is Best Buy (BBY), a company that sells a product that is a major category for the likes of EBAY and AMZN, a company that competes in an area where large firms such as Blockbuster Video have failed might prove to be foolish.

In other articles, I have written how "long-tailed" products are being distributed more and more through low cost online channels. Games at first appear to be "long-tailed" products. There are thousands of older games wasting away on shelves everywhere. Should NFLX enter the business, it might be able to squeeze more value out of old games. However, innovations continue to destroy the value of old games. The new Sony machine is expected to be a huge success and most of the old games will not play on the latest machines.

I have never suggested that NFLX would put movie theaters or producers out of business. People follow the crowd and buy what is "hot". Movie producers and game producers are addept at creating "hot products". Producers must collect millions of revenues to justify the costs required to make a movie. Producers win big on some and lose on others. A major part of their success comes from the DVD after-market but 100's of millions are made by making and promoting the "hot new product".

The game rental business and the movie business are similar. One can purchase or rent an old game or an old movie cheaply. Never-the-less, consumers go to the theater, pay $8 to see the show and spend almost as much on a box of popcorn and a large coke. The parents of young folks are willing to drop kids off at the mall to "hang-out". In flocks the kids go to the game stores to purchase the hot new game at a $40 price.

Note the difference in the purchase of a game and the rental of a video from Blockbuster. Blockbuster stores are normally located in a high traffic location but not inside high priced mall space. Games are bought spontaneously. After-all, the rental of a movie is likely to be made by someone who has a drivers license who drove to the store for the purpose of renting a movie. The point is that GameStop has identified a niche. Most of us do not go to the mall to buy ice cream, cookies or a game but many of us will not pass the smell of a good chocolate chip. GameStop stocks a high dollar inventory and turns it fast. The price to sales ratio is only .59. The forward P/E is under 15 times.

Bill Miller of Legg Mason Wood Walker, Sumner Redstone of Viacom and other very smart investors have invested in game stocks. My family owns shares in Electronic Arts (ERTS). Playing games on a privately owned machine is acutally relatively cheap entertainment. In the old days, game players spent one quarter at a time. In today's dollars, those quarters would be at least $1 at a time. Spending $40 on the latest game is the equivalent of 40 games. Some of the players play one game thousands of times.

After the design and production costs are covered, the manufacturing costs per game are minute relative to the sales price. To be successful, producers need a distribution channel to quickly convert the latest product to a "must have product". GameStop is the 800 pound gorilla that can make or break the latest edition.

Finally, the demographics are interesting. Gamers do not stop playing when they "grow up". Thirty and forty year old men and women who played Donkey Kong as kids now challenge players from around the world. They play new games or new versions of old games from the comfort of their living rooms. New technology allows gamers to carry on conversations or to "video-conference" with competitors from around the world. The situation reminds me of the "progress" made in personal computers over the years. A PC without an internet connection is nothing but a fancy typewriter. As soon as the latest innovation is on the market, all those old games are obsolete.

Should you decide to invest, you do so at your own risk. Should you invest, we suggest that you risk 5% or less of your capital on any one security.

Miller and Kupsky

STOCK OF THE WEEK: Jo Ann's

2005-03-08T07:28:00.000-08:00

Martin Luther King weekend of 2005, the Asbury Sunday School Class at Maple Springs United Methodist Church enjoyed a long weekend at Myrtle Beach SC. The weather was not the greatest but the company was the finest. The homeowners association had contracted for renovations to the buildings hallways, few people other than class members and family were in the building so we took advantage and turned the long hallway into a bocci ball court.

We had a great time, playing games, taking walks on the beach and visiting restaurants, outlet malls and other venues in the area. Better still, we got to know one another all the better. The most enjoyable time was a joint Sunday School session. We sat where we could watch the waves roll into the beach while participating in a wide-open discussion. The young and old participated. As a sentimental old fool, I cried.

Chuck and Sandra Kupsky made the trip with their delightful daughters Emily and Megan. Instead of a long introduction, I will simply state that these are "good folks"; the kind of people you want to get to know better.

Sandra and I learned of our mutual intense interest in investing. We both hunger to do as well as we can and we know we need to learn all we can. Sandra was thrilled to know that I have been writing about the market. She really liked my idea to post a "Stock of the Week" as a way to build a monitored portfolio on the web. We decided to work together to learn more and to share what we learn.

In the weeks after the Myrtle Beach trip, Sandra and I have been working. We have spent much time screening, re-screening and re-screening for the best stocks. The criteria we used included criteria that has worked for us in the past and criteria that is supported as valid by volumes of research. After a little trial and error, we have decided that I should do the screening until we get down to a list of 40 to 50 selections and that Sandra will do the "nitty-gritty" work required to choose the final weekly selection.

The following article represents much work. We have not invested in the company, but we expect to buy shares. We confess to be amateurs. We study the markets because we enjoy learning. We write for educational and entertainment purposes only. Nothing we write should be considered investment advice. Should you invest, the risk is yours and yours alone.

Is Decorating A Nightmare? Help is Here!

Turn on the Home & Garden Network any time of day or night to get tips on all your decorating needs. Program after program help a novice decorator like me in their creative decorating endeavors. That got me thinking, I can watch a variety of Home Decorating Shows on how to "set the mode" of my home, but where do I go to find the "stuff" I need. In searching for a "Stock of the Week" (SOW) I discovered Jo-Ann Stores (JAS). JAS is celebrating its 60th anniversary. It is the Nation's Largest Fabric and Craft Retailer with locations in 47 states.

Jo-Ann Store was founded on a single retail store in 1943. As of January 31, 2005 the retailer operates 851 stores, 114 are superstores. Averaging 35,000 square feet, the- "Create-It-Yourself" Superstore generates almost four times the revenue of their traditional store and houses a variety of competitively priced merchandise used in home decorating, sewing and crafting projects, including fashion & decorative fabrics, notions, frames, scrap booking material, florals, home décor items and seasonal merchandise. The company offers customers like me the choice, quality, style and support needed to pursue the passion of creating beautiful things. For additional information, visit Joann's.

When Alan Rosskamm was 10 years old, he spent his spare time in his Grandmother Hilda's store, straightening thread racks and folding fabric remnants. Today he is president and CEO of the nation's leading fabric and crafts retailer. He is the third generation involved in Jo-Ann stores, Inc., continuing the legacy of vision, quality & service.

The year 1995 marked a turning point when Jo-Ann opened a 45,000-square-foot test store, adjacent to its Cleveland headquarters, stocked with every imaginable creative item to "serve and inspire creativity." The store became the pilot for the larger format Jo-Ann Superstores. Their traditional stores average approximately 14,400 square feet. The Superstores offer an expanded and more comprehensive product assortment than their traditional stores and generate four times the revenue and approximately 30 percent higher sales per square foot. The current Superstore prototype averages 35,000 square feet. Management believes their Superstore concept represents significant opportunity for future sales growth.

With the Fourth Quarter earnings released Monday March 7th, Alan Rosskamm believes they are on the right track. The stock has been trading near its annual high of $30.18. He is pleased with performance in a year when the focus was on the long term strategy of converting to the Superstore format. Seventy-two traditional stores were closed or a total of 1,036,800 square feet compared with the opening of 29 Superstores or 1,015,000 square feet. Assuming the Superstores generate 4 X's the revenue and approximately 30% higher sales, 40 new Superstores planned this year should deliver continued earnings growth. Rosskamm is planning a more aggressive program of Superstore conversions in future years.

On January 13th, Jo-Ann announced plans for the third distribution center to support continued growth. Ground will break in March on a 700,000-square foot center in Opelika, AL to support the key southern states of Florida, Georgia and Texas. The distribution center is expected to begin shipping to stores April 2006. The new center will create about 425 jobs, making Jo-Ann one of the largest employers in Opelika, a city located just outside of Auburn, Ala.

Tony Dissinger, senior vice president supply chain management and logistics said the
Alabama center will reduce transportation costs and will speed delivery to the southern stores. The other two distribution centers are located in Visalia, CA and Hudson, OH.

Joann.com gives customers 24-hour-a-day access to creative projects and products. The site is designed to be a resource for sewing and crafting enthusiasts and offers content that is informational, trendy, inspiring and fun.

I also like the company because they demonstrate strong moral values. For example, Jo-Ann Stores, Inc. partners with customers and employees to raise hundreds of thousands of dollars annually to donate to national federated social service and charitable organizations such as Save the Children Save the Children.

From one 1400-square-foot store in 1943 to almost 900 United States locations today-employing more than 20,000 people-Jo-Ann Stores, Inc., has not only witnessed a creative explosion in sewing and crafts, it has helped inspire it. With 60 years experience, I believe Jo-Ann Stores is a company that strives hard to enrich our lives with the latest high-quality products from around the world, by helping us find and express our creativity every day, and by providing the ideas, inspiration and advice to help our projects succeed.

It would have been nice to have gotten our report finished last week before the earnings announcement, but we took the time to select the company we like the best. Besides, who can complain about the outstanding quarter. Earnings rose 21% to 32.4 million dollars, $1.40 per share.

Note also that we selected a contrary play. You will find few brokerage houses "pushing" retail stocks at the current time. Just remember that Barauk was correct when he said about a 100 years ago that the best time to buy your straw hats is in the winter time.

Also please note that same store sales were up 4.3%! In retail, same store sales is the metric you want to be strong.

Happy decorating!

STOCK OF THE WEEK: SUNRISE

2005-02-19T07:03:00.000-08:00

STOCK OF THE WEEK
The best tool for improving investment returns is to keep score!In the coming weeks, I will post a number of score cards. My hope is that you and I will benefit by learning more about strategies that work well and learning to avoid strategies that do not work well. Becoming a better investor is a journey. There is always room for improvement.At least a few of the score cards will be in regard to mutual funds. Millions of dollars are spent annually on mutual fund sales fees and on mutual fund management fees. Many of you already know that mutual funds have historically under-performed the markets in which they invest. On the other hand, there are millions of investors who have become extremely wealthy by regularly and routinely investing in mutual funds.In all cases, the wealthy investors could have and perhaps should have done better, but there are certainly no guarantees that any one of them would have done better. Many studies have documented the poor average relative performance of the actively managed mutual funds. For example, a Morningstar study as reported in "What Works on Wall Street" by James P. O'Shaughnessy, calculated that in the ten years ended September 30, 1995, equity funds with 10 year track records beating the Vanguard 500 index fund was 22%!Seventy-Eight percent of these "professionally managed" mutual funds lost money relative to the "whole basket of stocks". Of the 22 percent that beat the "basket" more than half of those just barely beat the average. Only 10% of all funds beat the "basket" by 2% or more!For many years, although I have done well investing in stocks, bonds and real estate, I have failed to keep or calculate precise scores. In recent weeks, I dug out detailed receipts for several years. The results are quite good. I will post them as another scorecard. In addition, I plan to do a regular column called "STOCK OF THE WEEK". When time permits, I will do more than one per week. I will track the performance over-time. I will note when either I or members of my family have invested real money in these stocks.As always, the articles should not be considered purchase or sale recommendations. The purpose is to educate and entertain. Should you decide to invest money in any stock mentioned, I recommend that you invest no more than 4% of your portfolio in any one of these ideas. I believe many of the selected stocks will perform well. By tracking the results relative to the broad market averages, we all might learn to be better investors.To that end, I have selected Sunrise Senior Living as the first STOCK OF THE WEEK. Much of the information presented was taken directly from the company's web page. I have also used CBS.MarketWatch.com and Morningstar.com as sources of financial information. While I do not claim to be an accountant or an analyst, I see value in the companies financial statements.The selection of this company was made more on "gut feeling" than for any other reason. Call it reasoning if you like. One might expect a leader in assisted living services for senior citizens to do well if one expects life expectancy to increase. Numerous authoritative sources and my own experiences suggests that life expectancies will continue to increase. One of my dearest friends has lived in an assisted living facility for a number of years. He does his own laundry, drives his own car and goes out regularly. He has the right to eat three meals a day at the facility but, like many other residents, he jumps at an invitation to dine elsewhere. The facility says and my friend has come to accept that the average cost of food for all tenants works out to be about the same in the long run. The healthiest tenants get out more but having an open pre-paid dining facility for all tenants is a nice way to handle food. Guests pay modest prices to dine at the facility.Sunrise Senior Living is the nation's largest provider of senior living services. The McLean, Va.-based Company employs more than 35,000 people. As of December 31, 2004, Sunrise operates 381 communities that are open in the United States, Canada, Germany and the United Kingdom with a combined capacity for approximately 43,000 residents. Sunrise also has 32 communities under construction in these countries with a combined capacity for approximately 2,900 residents.SERVICESIndependent living is a lifestyle option for active seniors -- without the worries of household maintenance. Independent living may offer apartment-style or condo-style living.Assisted living is ideal for seniors who need assistance with activities of daily living, including eating, bathing, dressing and medication management, but do not require 24-hour skilled nursing care. Working closely with residents, their family members and physicians, Sunrise staff members create individualized personal care plans intended to meet each resident´s specific needs and preferences.Alzheimer's care is generally offered through the Sunrise Reminiscence program and is provided in secure, homelike environments delivered by staff members who are specially trained to understand and meet memory-impaired residents' unique needs.Nursing and rehabilitative care is available to individuals who need 24-hour skilled nursing services, post-hospital or post-surgical care. Individualized care plans and regular health assessments are offered along with physical, occupational and speech therapies.At Home Assisted Living is offered in eight markets and provides assisted living services for seniors in their own homes. In addition to assistance with activities of daily living, customers of the At Home program also have access to housekeeping, home care and meal services.Hospice is available in most Sunrise communities through the use of a network of preferred providers who have agreed to abide by established best practices.Short-term Stays provides service to seniors when family members are away or need a short break from caring for the senior in their life or for seniors needing assistance after a hospital visit or during an illness.General amenities and services at most communities include dining options, activities, programs, transportation and housekeeping and are offered in a comfortable environment.LOCATIONSLocated in 33 states and the District of Columbia. States include: AZ, AR, CA, CO, CT, DE, DC, FL, GA, IL, IN, KS, KY, LA, MD, MA, MI, MN, MO, NE, NJ, NM, NY, NC, ND, OH, OK, PA, SC, TN, TX, UT, VA and WA.Operates in the United States, Canada, the United Kingdom and GermanyEXECUTIVESPaul KlaassenFounder, Chairman and CEOTeresa KlaassenFounder, Executive Vice President and Chief Cultural OfficerTom NewellPresidentTiffany TomassoChief Operating OfficerBrad RushChief Investment OfficerJohn GaulGeneral CounselLarry HulseChief Financial OfficerJeff JasnoffSenior Vice President for Human ResourcesKen AbodSenior Vice President and TreasurerHISTORY:Founders Paul and Terry Klaassen developed and opened the first Sunrise community more than 23 years ago to create a senior living alternative that centered on the resident. A contrast to traditional senior living and long term care alternatives. The resident-centered model practiced by Sunrise focuses on each unique person and his or her needs and preferences.1981 -- First Sunrise opens in Oakton, Virginia1982 -- Sunrise's first training manual developed and includes Principles of Service1985 -- Two more Sunrise communities open in Virginia1988 -- First signature Victorian-styled mansion opens in Arlington, Virginia1995 -- Sunrise's recognized Reminiscence Program for the memory impaired is developed1999 -- First community outside the United States opens in the United Kingdom2000 -- First community in Canada opens; Sunrise At Home launched2001 -- Sunrise (NYSE:SRZ) listed on the New York Stock Exchange2003 -- Marriott Senior Living Services acquired2005 -- First community in Germany opens outside of HamburgThe symbol is SRZ and the closing price Friday was $47.07. This is a fragmented business that is partially dependent upon government health care programs. It has not be a particularly profitable business for the past 10 years. Marriott tried its hand at the business but sold out to Sunrise in 2003. For the past couple of years, Sunrise has experienced slower growth and lower margins as it has worked to consolidate the Marriott locations into its system.Genesis Health Care (GHCI) is a competitor of about equal size and Five Star Quality Care is growing quickly through acquisitions. Kevan H. Namazi author of "Assisted Living" says the average age of residents in assisted living centers is 84 years.In 41 states, states allow Medicare to be used on assisted living costs. The average cost of assisted living is $1,800 month whereas the average cost of nursing home residency is $5,000 per month. Many folks have the preference of living at "home" for as long as they can so a number of programs have been started to offer what is referred to as res care. Sunrise operates a res care division.The leading edge of baby boomers will turn 60 this year. My wife and I will turn 55. We have put our four-bedroom four and a half bath home up for sale. We plan to buy a one level cluster home. We will pay homeowners dues in order to avoid maintenance and yard work. We may spend as much as half our time at the beach or traveling elsewhere. The point is that baby boomers need to start planning for old age now. Marilyn and I can picture ourselves enjoying staying in an upscale assisted living condo or apartment when we are no longer ready to cook and clean house.It seems there are a number of economies of scale in the business and a number of small proprietors have recently sold out. I expect this trend to continue.There are things not to like. Several insiders sold shares last year, the price earnings ratio is high at about 25 times next years estimate and operating margins are trending down. The company pays no dividend. The company has good cash flow, excess cash and relatively low debt but I suspect it will buy additional facilities if it gets the chance.I see this one as an attractive long-term investment. I am likely to buy shares within a month and will post a table to the web soon. #

STOCK OF THE WEEK : AMR

2005-02-04T07:24:00.000-08:00

This morning I purchased more American Airlines (AMR) and more Level 3 Communications (LVLT). With AT&T (T) being scooped up by SBC and with Quest making a bid for MCI it is clear that there must be value in "trunk" lines.

Some time back I wrote that LVLT is nothing more than a call option on Voice Over the Internet (VOIP) telephone service. The thesis is that voice, video and data will consume capacity at a rapid rate. The value of fibre-optic trunk lines will be enhanced when demand grows closer to capacity limits. The stock has already moved for a few days and it is a risky stock. The revenues could expand dramatically. This is another high operating leverage business. This type of business has to make a large amount to break even but then every dollar received afterward is almost all profit.

An interesting point is that both Quest and MCI went up in price on the take over bid. Some of this comes from the thought that Verizon (VZ) will buy one or the other or both. Another fact is that Quest and MCI are like AT&T and LVLT, the owners of considerable "trunk" lines. All four stocks were slaughtered after the bubble burst. Now all four are cheap enough to be take over targets.

What increased my optimism this morning? As usual the bad news was good news. This morning economist were disappointed at the jobs number. The US created only 146,000 new jobs last month. Economist had forecast more than 200,000 new jobs. The fact is that the economy is in great shape. The unemployment rate declined to 5.2% which is a very acceptable rate. The slow growth in jobs means the federal reserve does not need to raise short rates much more. Indeed the long-bond jumped in value this morning and is yielding about 4.4%.

The point is that the economy is not over heated, inflation is under control, interest rates are moderating and profits are strong. A favorable climate for business and stocks. Even the airlines might turn to the upside!

Productivity dipped a little last month but, wow, it has been fantastic for the past three years. Indeed, productivity has averaged 2.4 for the past ten years! By the rule of 72, a rate of 2.4% will double productivity in 30 years. This is extra good news for those of us who have retired or who will retire soon. It means in 30 years that one young fellow will be able to do the work of two of us old guys. It may not be intuitive but it means Social Security is not hurting nearly as badly as it looks. If the Bush plan goes through, there will be lots of Social Security millionaires and multimillionairs 30 or 40 years from now.

Jumping onto AMR or LVLT may be like jumping off the high dive; a little scary and a lot of fun. The high dive is not made for the weak of heart or for those who invest to preserve capital. Speculators should only invest a small portion of total assets into risky selections.

For more fun and entertainment, I purchased call options on the QQQQ this morning. The ones purchased last week have "covered the spread" and all options are "in the money". If what I am saying is Greek to you--good! Options are not really investments. Options are akin to lottery tickets. If you choose to buy lottery tickets, you should hope for a little excitement but you should not hope to win. If you do win a little pot you should not think that you are a lucky person and buy extra tickets as a result.

I have a lot of expectations for stocks and even a little hope for my options because of the strong bond market rally. There are big piles of money owned by folks who really do not like the stock market. However, these folks do not like locking into 4.4% yields for thirty years either. Put it another way, if rates continue to fall many companies will issue bonds to buy back their own stock. The companies will be able to boost their returns on equity with the stroke of a pen.

Buying stocks when earnings yields are 40% more than bond yields is swimming in a shallow pool. Diversify your holdings or buy Exchange Traded Funds but get in the water and have some fun.

STOCK OF THE WEEK: CAL

2004-12-22T07:14:00.000-08:00

CHICKENS OR AIRLINES?
Great Grandpa said the time to buy into the chicken business was at the bankruptcy sale. Grandpa had it figured two ways. If others stopped raising chickens the price of chicken feed would go down and the price of chickens would go up.

The way George Burns had it figured was that he would stay in show business until he was the only one left. George and Grandpa wanted to make big money by being in business when others were out of business.

At the current time, 4 of the 10 largest airlines are in bankruptcy. The top ten have dramatically cut their costs. American Airlines expects to cut its costs by 4 billion dollars per year; a whole lot of chicken feed! Continental already won big union concessions and has asked for another 500 million in annual labor savings! Delta is cutting 7,000 jobs! Bankruptcy judges are set to rule on the abrogation of union contracts! US Air may be liquidated! Need I go on? Can the airline business get much worse?

Three years ago, the cell phone business was in bad shape. There were too many players. Lots of small companies such as LWIN filed for bankruptcy. Even big companies such as NXTL and AWE were in bad shape. NXTL had a negative net worth. Since then NXTL is up 1000%! Eighteen months ago, AT&T wireless was suffering but Cingular bought the company at double the price! Sprint suffered through the worst of times and is now buying NXTL!

Sometimes, I learn from my mistakes. In 1982 the US car business was in terrible shape. Ford and GM were losing money and Chrysler was on the ropes. I bought Chrysler for $2.45 per share. In less than two weeks I doubled my money and, like a dummy, I sold the stock. The stock went up for the next 18 years! I would have made about 100 times my money if I had held on to this hurting business.

The Airline business has been in trouble for a long time. Current prices make no sense. Let's suppose that you own 12 Billion Dollars. Your nest egg is equal to the value of all the shares of the 6th largest and most profitable airline, Southwest Airlines. Your nest egg is also equal to the value of all the shares of the largest airline, AMR plus another 10.4 Billion Dollars! And believe it or not, your nest egg is equal to the value of the 3rd, 4th and 5th largest airlines combined plus another 9.5 Billion Dollars! Together, 3-4-5 are twice as big as AMR but the stock value of all three is slightly more than the value of AMR!

Numbers 3, 4 and 5 are Delta, Northwest and Continental (DAL, NWAC, and CAL). These three airlines participate in code sharing. Any of these carriers can sell tickets on any of the other carriers plus on a number of international airlines. Together they are a competitive force. AMR is number one but it is only half as big as these three. Number 2 and 7, UAL and US Air, are both in bankruptcy. Even if they both make it out, DAL, NWAC and CAL will be the stronger national and international competitor.

DAL, NWAC and CAL grew the combined revenues this year by 8%. All three dramatically reduced their operating cost. All three will produce positive cash flow next year and I believe all three will produce operating profits in 2006. No doubt, the airline business is very cyclical, which is another way of saying that when the airlines make money they make a lot of money.

Note that I am not saying that Southwest Airlines (LUV) is about to go down in value. Rather that the 3rd , 4th and 5th airlines are selling at an average of a 93% discount to the number 6 airline. If I had 12 Billion Dollars I would not even consider putting it all into LUV. On the other hand, I would enjoy buying all of DAL, CAL and NWAC if I still had 9.5 Billion Dollars left over! A few weeks ago, in monitored accounts, I purchased several hundred shares of CAL. Tomorrow, I will add additional airline shares. Caution! Put no more than 5% of your holdings in these stocks and be willing to sweat it out if the oil price surges again. Long-term holders should see substantial rewards.

By the way, most analysts do not recommend these stocks, which means that when the business improves, they will tell a lot of people who don't own these to buy. Although I am a successful amateur investor and have 42 years experience, don't buy on my recommendation. Do your own research, think for yourself and buy through a discount broker to save 90% or more on the trade cost! Make the purchase in a monitored account and I will keep an eye on your holdings.