Playing with BigCharts & Justifying Herman Miller

So after a trip to see my brother during the holiday weekend, I spent some time playing with a new-to-me website called BigCharts which is a service of MarketWatch. After throwing in some stocks of mine like FTO, HMC, and a stock Grant wanted me to research IR, I got back to MLHR. See the interactive 1 year chart of Herman Miller right here. Adjust the settings to show the three to four years of trending.

My point is that here is a company that has shown increasing earnings consistently for over four years, increased it's dividend each year, consistently great earnings reports each quarter, low p/e of 10.1, and yet it is near its 52 week low on share price. Why aren't people screaming for this stock to go up? Maybe because they make furniture, I don't know. You all should take a look and tell me what I am not seeing.
(Edit later on 5/27/08): Found a good article by someone named Paul Price on Seeking Alpha about MLHR here. Also, he has me interested in Coca-Cola now.


Will the government do anything about the housing slump?

Answer: If they care anything about their city, state, and federal budget, you bet their ass they will.

Being the rabid NPR listener that I am (insert joke here), I have been listening to the senators and representatives dance around the delicate issue of the housing slump and the potential for the government to get involved. Bailing people out is not a something the government should be doing but what I find extremely interesting is that no one, and I mean no one is talking about how housing foreclosures is affecting the local and national governments budgets.

With each home added to the sales market and even more homes being foreclosed on, the government is leaking potential budget revenue by the bucket load. Homes values are decreasing drastically which in turn allows the government to collect less money for property taxes. After 5 straight years of increasing property taxes, a lot of the current government offices, especially on the local level, are filled with people who haven't ever dealt with a short fall, so heck yes are they going to try to put something together.

I think that right now they are simply slowing down some on the legislation to appease the renters of America, which they do not collect much money from, and then will go right back into pushing a bill forward to assist on some of these loan defaults. The problem is that it doesn't really fix the problem and could put the government at a big risk of inflation. They keep saying some sort of crap about making sure that the help gets to the right people who actually need the help, but what does that mean? Does a family who makes $100k a year who bought a $350k house with 0% down on a 3 year ARM get the help or were they the wrong people. Or is there even a different kind of people than that causing this insanity in the first place?

It is really scary when you think about it, because the people pushing things forward aren't thinking clearly, they see budget cuts and think, "crap, I can't afford for our budget to get smaller, I promised this, this, and this." Reality though, and I hope it wins out, is that the market needs to adjust for itself. The banks screwed up, the public screwed up, and now the government needs to stay out. The governments are going to hurt for a couple of years, but ultimately a market should be able to adjust for itself.

Here is the other problem, if government steps in and gets banks to accept homes at 75% of their current value for defaulting home owners (one proposal out there from the government), how is that fair to the home owners not missing payments?

I apologize ahead of time for this post being messy, but it is late and well that's my excuse.

Moving, Learning Lessons, Proving Yourself, and Being Unleashed

Here's a little story about MJ. MJ used to work at plant supporting several assembly cells making lots of cool little products. He did well there, even getting the company out of several jams with their major customers, but found when management changed, he was on the outside looking in. He worked hard and really helped things there, but he was young and he made mistakes at times. It was weird though, the better he got at his job, the more the management thought it was time for him to go. He fought hard to to keep the job, but realized it was futile. MJ took it personally, he thought he had failed to prove himself. So MJ quit, contrary to some of the advise of friends and family, and started preparing himself for a new job.

In that downtime, MJ reflected on what he did wrong, what he could do better, and what he was damn good at. With that he pounded the job boards and recruiters, and after getting several good offers and interviews, found the perfect fit.

MJ used to work with 20 other engineers and answer to dozens of people, the new job consisted of him, alone, supporting the whole factory. Seems scary, but in reality it was freedom. Remembering those traits that had flawed him in the past, MJ went about reinventing himself. He started fixing things, proving himself, and winning over the management. With that lack of engineers and management to answer to, he found the freedom to do what was right with the plant. MJ took on a huge project and made it a success. Then took on another, and another. Those went pretty well too. MJ was succeeding, shaking off a stigma of failure that he felt after losing the battle for his last job.

Today, this day, MJ was given his biggest project yet, and told to make it happen, make it what you want. He realized that day, he had proven himself, and he was now unleashed to actually push the factory into a new direction as he saw it. There was no more thought of failure, it was a good feeling.


Righting the ship...

I was waiting to say anything it until I was at least 3% into the black on my Roth IRA, but I am now officially Back in Black (by 5%)! I have had trouble the last six months finding a profitable portfolio and wanted to readjust into some safe value minded stocks and ETF's that should be good for the long run.

Key sales: STP, PBD, PNCL, Polaris Global Value Fund
  • STP and the entire solar market started to fall after a big markup; I wanted to keep this for the long term but selling at this time still allowed for me to collect some profits. I still think Suntech is the Toyota of the solar market and along with Sunpower are the best of breed if you are looking to find a long term solar investment.
  • PBD fell based on that same big solar put back. I got out at $27.45 a share, but later I got back in $25.62 a share (now at $29.70 a share). I know that this ETF is getting lumped in with the other solar stocks in investors minds, but as I have stated before in my first evaluation of this ETF, it is the best of all available alternative energy technologies in the world not just the US. The best technologies being windmills. This is great long term ETF that is in my opinion the best and safest alternative energy play.
  • PNCL may be a good play some time, even right now, but I am out. It is a suggestion out of a magazine that I thought, "Hey, this makes sense" and bought shares without my usual research. Pinnacle is basically a small airline partnered with Northwest Airlines and others to take care of some of the lesser puddle jumping locations in the states. It made sense until one day I remembered this is one of the industries that tied to gasoline charges and then they made a purchase of another small airline that, low and behold, has a lot of unforeseen debt. Bad call by me.
  • The Polaris Global Value Fund is a formerly well liked, low expense mutual fund that typically invests in global value rated small cap businesses. Historically small cap value businesses don't do well in rough economies and then takes off when the economy turns back into a bull market. Well I bought this fund in a bull market and then it has slowly been leaking profits ever sense. I may purchase this again, but my money is currently better stored in PWV.

Key purchases: BEZ, PXE, PWV, PBD

  • BEZ was written up in this post a few weeks back and has already helped my portfolio greatly. I still like this company in this economy and for the longterm for the same Buffet'esce reasons as I have listed before and feel that is still in a "buy" stage. Wait for another couple of pull back days; it has been on a tear again. I would buy anything below the $34 range.
  • PXE is a stock that I have owned for over a year now and I decided to add more. It is the Powershares Dynamic Energy Exploration & Production Portfolio and it makes a whole lot of sense to just keep adding more and more of this ETF. I am a firm believer in alternative energy and fuels, but currently gas is what makes the world go round. Spend some time in checking this ETF's top five stocks and you will see several of the price explosion stocks over the past year. This ETF is going to continue to keep growing for at least the next three years, so at almost any price it will continue to gain value. I am going to keep purchasing it on bad days for some time.
  • PWV is Powershares Dynamic Large Cap Value Portfolio and Lipper just loves it. It has a five star rating over the past three year in four categories and a four star rating for the expense category. It is built up of value minded large cap companies, so it should be tough enough to weather and grow in this economy. Oh, and it has been cheap recently, shares a fairly good dividend at 2.44%, and in a growing economy should take off. If it follows its past three years of data it will beat the S&P's growth by 5% to 10%. It is safer than a mutual fund and has a much better potential upside. I am buying as long as it is below $21 a share.
  • PBD for the same reasons listed above.

We will see: MLHR, FTO

  • MLHR is a great stock, has a bunch of cash on hand, caters to upscale customers, P/E of 10, 1.5% yield, and is consistently showing increasing profits in quarterly reports. Herman Miller furniture is high quality and a good product, but everyone seems to be staying away from it. I have amassed a lot of this stock as I think it is still a great company in bad times. It is one Kramer or SmartMoney recommendation away from taking off I think, but for now I am holding my breath.
  • FTO is another great stock that I don't understand. It's stock performance is closely tie to the overall refinery market, but Frontier keeps recording record profit, P/E of 6.5, lots of cash on hand, and well seems cheap. I may buy a little bit more because I think this is ready to explode soon.

What I do well at in my opinion is doing research and finding value minded stocks and ETF's and my current Roth portfolio reflects this. I suck at selling at times when my stocks are still profitable. I need to start adhering by some rules of when to get out, but need some ideas. When I figure out my plan, I will share it some more here, but I tell you what it feels great to be back in black, especially in this economy.

Last thought: Buy PXE on off days. Oil is king for some time.


Current Life

Step one: Get ready for work, think about work I haven't done yet. Worry a lot about it.
Step two: Go to work, continue thinking about work I haven't done. Worry slowly turns to a plan.
Step three: Arrive at work, immediately unpack and hook up laptop. Curse boss for lousy laptop (sometime email boss about lousy laptop). Check email and schedule, decide screw that and walk the plant.
Step four: Wave, salute, and speak with any and all employees, try to see what's wrong and give updates to the people. It's like running for office except I don't lie, well mostly.
Step five: Go to meetings...
Step six: Immediately become hungry, the only satisfaction is random donut/cookie/candy preferably stolen from another employee's office.
Step seven: Steal above.
Step eight: Get caught stealing food but change subject to something he/she owes you.
Step nine: Do real work.
Step ten: Begin worrying about all the crap I am thinking about that is needed to do at newly purchased home.
Step eleven: Worry a lot about when the home will be ready to move in. Cease constructive work.
Step twelve: Worry slowly becomes a plan.
Step thirteen: Get ready to leave.
Step fourteen: Worry plan on house isn't good enough while driving home. Worry becomes new plan.
Step sixteen: Work on house, thinking of work.
Step seventeen: Work on house, thinking of work.
Step eighteen: Work on house, worrying of work.
Step nineteen: Work on house, worrying of work.
Step twenty: Arrive at apartment late, exhausted, wanting nothing more than bed.
Step twenty-one: Wash, rinse, repeat.


New Years Resolutions Check #2

  1. Buy a house for the misses and me.
  2. Setup a truly easier lifestyle at said home.
  3. Max out Roth IRA for 2007 (til April).
  4. Begin a true side business.
  5. Go on an extended vacation.

Above is the list I made at the beginning of the year. My GF and I did indeed purchase a home and are currently getting it all ready to live in, which is taking longer than I like. But I am also happy to report that the Roth IRA is maxed out for 2007 and I have put measures in place to have 2008 maxed out a couple of months early, instead of two days before tax day.

Yeah me...