2012 Stock Pick of the Year

Feed Me! Nom! Nom! Nom!

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Again, my friends, I must apologize for my scarceness on these pages.  I know there are times when many of you may plead for my acquittal from this site, as there are times (due to my acute boredom and incipient ADD) I am here commenting like an Algonquin Round Table wag at the height of the Flapper Era.  You must get sick of that.

But if December is always a rough month in my business, then the last week of December is often the grande chancre (sic) beyond all imaginings.   It’s been ever thus, and it doesn’t matter if I take the week off from work or not (and I do, in the grand tradition of my own bosses past, thereby leveraging my subordinates and allowing me some time with the family), as the former “filter” I thought I had constructed has fallen, by steps, to the technological immediacy of first voicemail, then e-mail, and finally (shudder) Skype.  And to think, this is not even a “capital gains lock-in” year.  Oy.

To make matter worse, this has also been the traditional week when Mrs. Gint gets together with her Wyrd Sisters and our aggregate families (10 children in all) here in town.  So between entertaining between 18-20 people (depending on when grandparents and great aunts/uncles/cousins arrive) a day/night, and juggling three live deals and one dying one via electronic media, I end up neglecting you, dear reader.  Again, I beg your pardon.

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For those of you who were thinking that “The Stock of 2012” would be of the “precious” bent, well, good for you.  Valuations are at 52 week minimums about now for most of my favourites and if you are a loyal subscriber to The PPT, you know that most are also reading “oversold!” in a big way as well.

(Aside: You are crazy if you are not taking advantage of this end of year special for The PPT, as the overall market hybrid alone has been knocking the cover off the ball for those using the patented “Fly Step-in Methodology” for entrance and exit).

Well, yes, this is a good time to be accumulating SLW, EXK and AG, and GDXJ for the new year, if only for an oversold bounce (if you are feeling chicken).

But this year’s Pick of the Year is going to be something  you can put away for a longer to near terminal hold.  It’s the tightest ship in the shipping bidness (sic)– United Parcel Service (UPS).  I am biased, as I’m a long time holder of this King of the Transports (and the $TRAN weekly is looking very smart here, btw), but I think that 2012 may be the year that UPS finally “breaks through.”

Fundamentals are not my bag, so I won’t belabor them, but it is important to note that UPS is the market leader in package transport, with over 15 million pieces moved a year (over double that of rival FDX).  What’s more, despite its unionized work force (Teamsters and Independent Pilots Union), UPS manages to eke out considerably better margins (about 350 basis points better) than the flashy FedEx purple people, most likely due to its entrenched market presence and it’s flexibility in trucking delivery (for example, UPS delivers 1-day, 2-day and regular business deliveries all from the same vehicle route, while FedEx uses wholly different carriers for the different delivery times).

Of course UPS also offers a fatter dividend.  At 2.80% at current market prices (and I’d like to buy it closer to 3.0% anyway), it is about 220 basis points better than rival FDX.  UPS is a cash cow, with $3.5 billions in free cash to either reinvest in new planes and trucks or to mail back to shareholders.  UPS also uses that cash to buy back shares, which is of course accretive to overall value.

But UPS is also a great hold for the future, as  well.   Any good wife will tell you… the wave of the future is internet delivery of just about everything.  And if you love AMZN, God bless, they are a great company, but by no means impregnable from a barriers to entry standpoint.  Now, how would you like to try to start up a rival package delivery service that will meet up to Amazon’s exacting demands (not to mention your mother in law’s)?

See where I’m going with this?

Last but not least, from a technical standpoint, UPS is again nearing all time highs, which it will eventually have to surmount.   Like one of my better gold picks this year– AUY–, UPS has been attempting to break that “lid” at $75 for while now.   If earl prices remain somewhat accomodating, then I think this may be our year.   Note my weekly, which shows the formation that marks the $TRAN itself… a 13-week/34-week EMA crossover (the weekly “golden cross”) and an attempt at breaking to new highs:

And my daily chart shows where I’d like to enter… at the 20-day EMA, if possible:

 

And that is all for now, boys and girls.  I will be back with some predictions for 2012… I hope before the dawning of that auspicious, and seemingly most pre-benighted year.

Best to you all.

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[youtube:http://www.youtube.com/watch?v=4UOp4ZZZJDQ 450 300]

And  a Swingin’ Kermit Ruffins N’awlins Christmas to You!

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Fughedabout Aaron Rogers.  You can keep your San Francisco ‘Niner defense.  Does anyone really care what fatboy Rex Ryans is saying this week?

No, this week the only NFL story worth discussing is that of the incredible young man from Austin, Tejas, who plays for the Cajun Fried Steak Flavoured N’Awlins Saints, Drew Breezey-Brees-ieaux.  Tonight, in somewhat karma-challenging fashion, he broke Dan Marino’s single season passing yardage record of 5,084 yards by three yards by repeatedly ramming the ball down the throats of an overmatched Atlanta Falcons defense.

Even though they were ahead by almost 30 points, Brees kept throwing and kept trying to stay out on the field. For the record, I think this was an incredibly poor showing on the part of head coach Sean Payton (former Giant offensive coordinator, I should mention).  After all, the Saints will have to play the Falcons twice a year from now until the league changes the makeup of the conferences.  Does he think his team is going to be this dominant forever?

I don’t blame Brees, of course, as he wanted that record at home where he could share it with the fans who’ve waited the for the near end of forever for a moment like this… for a player like this.  But Payton should have shown some maturity here.  I think that kind of scoreboard abuse reflects poorly on his judgment and on the organization.  It’s the kind of thing I’d expect from a Rex Ryan, but not from someone who came out of the Giant organization.

Whatever, it’s done and the Saints will have to deal with that issue next year, or possibly in the playoffs if they see Atlanta again.   Tonight is Brees’s night, and he deserves a golden football, dipped in chocolate and plated in silver.  Good for him and for the good (and loyal) people of N’Awlins.

Tomorrow… my “best pick” for 2012.   A golden lollipop dipped in chocolate and swaddled in caramel for the reader that guesses correuctly.

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[youtube:http://www.youtube.com/watch?v=1KDLvClhSQ8&feature=related 450 300]

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I don’t know about you guys, but we’re on our third bottle of wine ovah heah, while we put together the last implements of Christmas with the extended families. It’s gotten me into a reminiscing mood…

Since even before I was married and before I had all these great kids, I’ve been spending Christmas with the Kentucky side of the family. For more than a decade and a half of that time, our Christmas was spent in the remote mountains of Eastern Kentucky, where my father in law was “King” and as was his due, he lived in a large house on top of a mountain surrounded by trees and rivers and vast quiet. It was sublime, as the house was big enough to accommodate all of his daughters, their husbands, and children at Christmastime. What’s more, even filled with people like that, one could always find a quiet room with a fireplace to devour a book that had been pushed aside by the exigencies of city life.

I would usually take the entire week between Christmas and New Year’s off, and even if I was busy at work and had some end of year fire drills to march through, I would find that the stillness would soothe my soul, and ready me for the new year ahead. I think the atmosphere of that environment took all we temporary residents back a step. No one thought of putting on the TV, but there was music playing in the background all week long. Even with all of their cousins present, it seemed that the kids were better behaved in that place. We were at peace.  I miss it terribly.

In more recent years, my in-laws retired and moved back to the city to be near their grandchildren, and now live in a lovely double-townhouse in the Victorian section of town. We still all come for Christmas and the music is still here, but as you may imagine it’s a vastly different experience from the frost-rimed woods and the ash-colored mountains of those earlier Yuletides.

Still, the joy of family is the same, and if anything, the bonds have become stronger as a result. We, who have evolved from strangers, have become cohorts in building this next generation present among us. This Christmas, and Christmases forward, we can begin to take pleasure in unwrapping the presents we’ve wrought for ourselves. They are mighty.

I wish a blessed Christmas season to you all, my friends, and much joy in the New Year.

 

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December is not just a month for Holiday Good Cheer, drunken egg nog slopping and impulsive last minute shopping, it’s also the greatest month — seasonality wise — for that beautiful savior of Third World agronomies everywhere — Monsanto (NYSE: MON).  As you long term readers may recall, MON is a long favored Jacksonian that has been undergoing a significant consolidation period,  not unlike that of the recently reinvigorated gold play, AUY.

The PPT tells us that MON‘s December trading indicate an 84% positive ratio, which is significant enough.  What’s more monthly returns in December are averaging +5.6% over the last 12 years, including  down months.   Here’s the good part — we’re down over 3.7% this month since we closed November 30th at  $73.45 (closing price today — $70.72).   That means if we get our traditional late month Santa Claus rally — as pointed out by my friend Woodshedder in his blog post the other day, then we could be talking close to a 10% expected return between here and the end of the month.

Now take a look at this long term weekly chart.   Note how obvious our resistance level is here?

At $74.64, that line in the sand is only 9.5% away from here.    Let’s make that our target, shall we?   If we break through it, all well and good, because that will indicate substantial continuing momentum on this Hippie Hater.  Otherwise, we have a target with a nice return for the end of the month.

In any case, I continue to think MON should be in your core holdings, until someone comes along that can compete with their deep-seeded (heh) IP portfolio and market dominance in the ag space.   I don’t think that will be coming any time soon.

Best to you all, Green Revolutionaries (the good one, not the pinko one).

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Get ye some vampire gold!

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Time and time again, I’ve stood here and recounted the reasons why I stay away from the large cap gold miners like AEM, ABX, NEM and even GG (though I do own a little of this one from the Wheaton Gold days).    Sure, these are all fine old girls, but they often end up on the wrong side of an acquisition play which then ends up trashing their stock price in a volatile gold market.

That means these big hulks are generally buyers, for the most part, as their management team has little to do but acquire more assets in order to expand away from relatively diversified and well known properties.  They need new territories, fresh blood, new meat; and the highest percentage way to continue drilling on profitable properties is to acquire them from juniors who have done the sweat work to seek them out.

Well, it seems my lonely EGO has gotten all egotistical on me and wants to be a “playah” like the big boys.  No more holding it’s hand out as trade bait for the majors, Eldorado Gold is officially leaving the middle-market gold mining community in its dust and going gold speculating in Turkey, Greece and Romania.  

Yes, you got that right.   They’re offering $2.5 bn of their own stock in order to buy a company (European Goldfields) that is looking for gold in respectively, the next Islamofascist hot spot, the First Beggar of Europe, and oh yeah, a place known for producing pickpocketing gymnasts with facial hair and night dwelling blood suckers without.

That should work out well, fellahs.   Probably very little nationalization risk you’ve paid for there….

In any case, these M&A purges usually overdo themselves, so my beaten down EGO is probably a good pickup here tomorrow morning after what I expect will be a final washout.   There’s support at $12, but I’m not sure we’ll get that far.  Nevertheless,  I’ll place my bets in that area, hoping to catch a bounce.

Oh, and I think everything else will bounce as well.  Most especially earl and gold.  So tomorrow, if I get my flush, I’m going to throw down for some NUGT and for some ERX.

Don’t worry, my stops will be tight.   I’m not a masochist, after all.

Best to you all.

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Options expiry week always makes for fun times in the already-volatile precious metal markets, and this week was no exception.  In fact, I’m thinking of just posting pictures of Care Bears and soothing contra-alto laden Carpenter’s videos during these weeks in the future.   I think that policy would be much better for our collective gastro-intestinal health.

I guess we should have been even more wary this week, as the POG and it’s idiot sister, the POS, were both due for cycle lows on top of their collective miners’ options’ expiry.    That combination made for some sickening drops this week, and now, I contend, for some very attractive purchase prices.

When was the last time you were able to buy SLW under $30.00?  Howabout ANV under $30??  Oh, sorry, that was yesterday.  You snooze, you lose.  SSRI looks like a nice pinch right now, if you’re looking for a cherry.   EXK and AG in that order, remain the best of the silver surfers, however.

For those wading back in, the ETFs would be the order of the day… I like them in this order — GDXJ, SIL, GDX, and for the brave of heart — NUGT (real small now!).

I made mention earlier in the week that I want to see the price of gold ($GOLD) hold that 34-week EMA.   It will be interesting to see if it does get back there today…as that’s $50 north of current prices at $1642.80.  There is precedence for closing very briefly below there on a weekly basis — way back in April of 2009, when we were just crawling out of the muck.  Could this be a similar situation?   Let’s see how we close today.

Best to you all.

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