Snowcat's Hot Stock Update!

[eliteG]

I really enjoy this thread snowcat!    Your military quotes are great!  TZOO is a monster.. made for short squeeze rallies.  Good Trading to you Snow. 

[snowcat]

04/25/06
"Cluster bombing from B-52s is very, very accurate.  The bombs are guaranteed to always hit the ground." – USAF ammo Troop


The bombs were exploding on my portfolio today with nothing left unscathed.  I am waiting for the US to send in some foreign aid as even TTM got a haircut.

I bought TGC and TGB weeks ago because I could not remember which one was the one I wanted.  So I bought both.  I'm up 50% on each.  What a dope!  TGC was up 18% on the day.

http://finance.yahoo.com/q?s=TGC

I was concerned earlier in the week at WIRE's earnings.  I knew they would be great, but was unsure how the stock would react.  Well, earnings were awesome and the stock is up 10% after hours.  It happens.
http://finance.yahoo.com/q?s=WIRE

Audio company, IFO, which was basing for a long time since I sold it at 17, had a big breakout today, up 14% on strong volume.  This is a great company with strong numbers.
Definitely one to watch!
http://stockcharts.com/h-sc/ui

In the "I know nothing department", NTRI, which I bought at 14 and sold at 17 was up 17 today (34%).  Amazing, but true!  Now selling at 68!!
http://finance.yahoo.com/q?s=ntri

My recent purchase, and IBD top 10 under $10, MED, went with the Momentum MED is the place to be - great numbers and a chart to die for!  Die of starvation, that is.  People on a MED diet look great!  I can tell those people when I see them on Jones Beach.

NTRI people always have a donut in their hand.

http://finance.yahoo.com/q?s=MED.

Other things I sold a while ago: STRL is looking very nice.  The Texas construction company is looking strong as hurricane season approaches.
http://finance.yahoo.com/q?s=strl

This is enough for today.  Tomorrow will be better.  Snowy

[snowcat]

04/26/06

"Tracers work both ways." – US Army Ordnance

Oil prices fell today and that caused some stocks to rise, but caused the hot "alternative energy" market, ethanol, solar power, oil sands, etc to fall.  But still the local gas prices shot up because the price of oil only immediately impacts the price of gas when it is going up.

STRL, which I picked up yesterday, was up 7% on 3x adv.  The construction company that does mainly municipal work in TX got a good backlog and a thriving business.  They took off last year when the hurricane damage occurred.  The stock was up 7%
http://finance.yahoo.com/q/bc?s=STRL&t=1y


Jones Soda, JSDA, is looking good.  The Boutique soda company keeps inching up.  I would not be surprised to see a boutique energy drink from them.  Take some nasty lemon soda, delete the bubbles, add caffeine and charge $2 a can.  Voila! Energy drink!
http://finance.yahoo.com/q?s=JSDA

Maker of portable blood analyzer machines, ABAX, has earnings coming out tomorrow.  Against my better judgment, I will hold.  So far I am 0 for 2 with earnings this quarter.
http://finance.yahoo.com/q?s=ABAX

New issue, VIMC was up 9% after a dismal week.  They report earnings today.  I think this tech company will do well, but who knows?  I still like them.
http://finance.yahoo.com/q?s=VIMC

RGUS.ob, which plans to make super efficient engines, was up 17% today.  It might be all hype ala XSNX and OTD, but if there is money to be made, I am there.  I entered this in the 3SOF contest, but for some reason it is not there.  A sure winner!
http://finance.yahoo.com/q?s=RGUS.OB

I did some homework yesterday- HERE are some interesting stocks that are ethanol related.  Remember, PEIX and XTHN have no earnings, so here are some real ones:

MGPI - remember this from the Adkins craze - they are one of the biggest alcohol distillers in the US
http://finance.yahoo.com/q?s=mgpi

STKL - Bush spoke about Switch Grass - this company works with it.  They have a profitable organic food business
http://finance.yahoo.com/q?s=stkl

IMCO - they make parts that convert engines to use ethanol.
http://finance.yahoo.com/q?s=imco

Ethanol is corrosive to engine parts.  Also, the MPG you get is less with ethanol than with gasoline!  But ethanol is made from old vegetation, gasoline comes from old dinosaurs.

Another energy stocks that is being mentioned on the boards is SRGG.  I see no earnings, but it has gotten a lot of play from newsletters and spammers.
http://finance.yahoo.com/q?s=srgg.ob

Not the best report, but it will only make tomorrows look better.  Snowcat

[snowcat]

04/27/06
"Five second fuses only last three seconds." – Infantry Journal

The fuse counted down on ethanol and mineral stocks as Oil prices pulled back a little.  They went up very fast and are due to come down a bit with the President's initiative, etc.
The fear is now inflation, the dollar buying less.  Last year, $20 bought 10 gallons of gas, this year it will only buy 6.  The price of anything is transported with oil or made from oil will go up in price.  That means everything except your salary.  If people think folks will buy fewer cars, computers, clothes, houses or anything, it will impact the stock market.

I held ABAX through earnings and got poked in the butt again.  When will I learn?  The stock dropped 9%!

Elite G of 3SOF likes STKL, the organic food company that dabbles in ethanol.  They are a profitable company with a nice chart, but earnings are due shortly and I would be cautious.  http://finance.yahoo.com/q?s=stkl  around $10

JFK said that the best time to fix a roof is when the sun is shining.  Be patient on the ethanol stocks for now as prices retreat.  As ethanol replaces MBTE, the demand will remain strong.  In TX, several gas stations were closed because there was not enough ethanol to treat the gasoline.  So keep an eye on XTHN, PEIX, MSGI, etc.

There was a good article on JSDA.  The company is getting a lot of press and the chart is very sweet.  Now if the berry-lemon pop could replace ethanol, we'd be in good shape.  Most skateboarders prefer ethanol to the berry-lemon pop, btw.
http://www.thestreet.com/_yahoo/pom/pomsut/10281455.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

ASTSF has been on fire recently with a picture perfect chart.
http://stockcharts.com/h-sc/ui?c=astsf,uu[r,a]daclyyay[dc][pc10!c20!c50!d20,2!c200!d10,1.9!i!b50!b200!f][vc60][iuo14!lp14,3,3!ld20!lg!lc20!ll14!lb14!la12,26,9]
They do semiconductor testing and processing in Taiwan.  It sells for just over $10.

TZOO dropped 7% after a great run.  It went from 53 to 38 this week.  There might be more to go with this stock as people who want to travel will be looking for bargains.

Best of the Chinese Mah-Jongg companies, GIGM continues to soar as it breaks through 8.  I am up about 174% on what I have left of this one.
http://finance.yahoo.com/q?s=gigm

Let us hope for a good run into the weekend tomorrow.   Because you are the best!  Snowcat

[snowcat]

04/28/06
"It is generally inadvisable to eject directly over the area you just bombed." – US Air Force Manual

Good thing I did not eject from ABAX as the portable blood analyzer yesterday as it bounced right back today – up 11%.  That is a good sign and I expect this company to continue to grow.

I bought back into IFO as the audio company has made a nice rebound from a brutal nose
Dive back in January.  I have renewed confidence in this one.  Even when it swooned, the numbers looked great.  I put this one in my IRA.
http://finance.yahoo.com/q?s=ifo

I am confident that heating and a/c company, FIX will make it to the IBD 100 once it hit 15.  I said that when it was 12.  Well look for it tomorrow on the list – the added exposure should help the stock (if it makes it, but I think it will).
http://finance.yahoo.com/q?s=fix

Cramer likes BAC and VLO, big companies with low pe ratios.  He is also sweet on AKAM, CNXT AND MSPD fwiw.  Cramer's favorite, UNH has been under SEC investigation.  Biggest drop I have seen in a healthcare stock.  I bet someone wedgies him at his live show over this.  But still they watch him on his TV show, Mad Money.  I don't.  But some people do.  Probably when there is a repeat of "Spongebob Squarepants" on the Cartoon Network.

GIGM is still strong and number 1 on the IIC top 10 under $10!
http://finance.yahoo.com/q?s=gigm

Don't overlook STKL – Organic foods (remember WFMI), Ethanol (look at PEIX) and a nice chart.  What else you want?  A rubbbbber biscuit?
http://finance.yahoo.com/q?s=stkl

Others looking nice are TGC, TGB and ASTSF.  Check-em-out!
http://finance.yahoo.com/q/cq?d=v1&s=tgc+tgb+astsf

The weekend looks great in NY and I hope it is a good one in your neck of the woods.
Don't invest without thinking about what you are doing.  Snowcat...

[snowcat]

05/01/06

"Try to look unimportant; they may be low on ammo." – Infantry Journal

It was hard for me to look unimportant today with so many stocks blasting off!

A newsletter that put GV on the map over a week ago recommended LBIX today. Since it was successful in doing so, my guess is, those same people will be watching the next one. I'm not in it.
4-29-2006 – LBIX- UPDATE – up about 30% today.
http://www.leadingbrandsinc.com/company/investors/newsletter.asp?id=20

ABAX was down 8% today. (Up 8% Fri, down 8% Thurs).  Getting too volatile, but I like the stock.  If my gain falls to 10%, I will sell.

GIGM smashes thru 9 like butter.  The stock was up 16% on huge volume. 

CRESY, our South American Agriculture stock, up is up 11% today, and it still looks good!
http://finance.yahoo.com/q?s=cresy

I sold ENY, VIMC and CYBS because they were not performing up to my expectations.  ENY had volume too low, VIMC was an IPO I never should have bought and CYBS just died in my arms, like Lassie.

Oil stock, TGC took off like a gusher today, up 14%.  Again.  Still low priced!
http://finance.yahoo.com/q?s=tgc

ADM up $1.53, PEIX hits $34 again and JSDA blasts through 9!

FIX made the IBD 100 and held over 15, which is good.  Next for the list could be COGO or MED.  Check them out.   Snowcat

[snowcat]

05/03/06
A moment of silence for Louis Rukheiser........................

But the market was not silent as the tensions in Iran caused Ethanol stocks to jump!
ADM (+$1.35) and MGPI (+$2) are giving me some nice gains.

RGUS.ob, the developmental motor stock was up 12% - real yoyo

Today I was torn on keeping stocks like ABAX and FCFS which have not yet met my expectations or selling them and pursuing other ventures.  Why?

Well, ERS, which I sold near $20 has been on a rocket ride since April and is up 5 today and now near 60!  DXPE which I got bored with at 16 is up $4 today to $52!  Oil refiner ALJ which seemed dead in the water at 20, is now over 30! Yow!  And I won't even talk about NTRI.  Makes my head hurt!

Ok ok.

On the other hand, look at something like NWRE - or NGS, both were doing great then fell like lead.  So you have got to take profits while you can and keep your leash short on pullbacks.

CHID.ob, yesterday's buy, was up 30% on 5xadv.  That was a find by TA master, EliteG!  http://finance.yahoo.com/q?s=CHID.OB

This is Elite G's report on GV if you missed it.  Terrific work which is worth repeating:

GV(amex) - Goldfield Corp.

Sector:    Industrial Goods
Industry:    Heavy Construction
Mkt Cap:       35.34M
Float:            23.53M

Profile:  The Goldfield Corporation provides electrical construction and maintenance services in the energy infrastructure industry in the southeastern and mid-Atlantic region of the United States. Its principal lines of business include electrical construction and real estate development. It constructs transmission lines, distribution systems and substations, and other electrical installation services for utility systems, and industrial and specialty projects. The company also installs fiber optic cable for fiber optic cable manufacturers, telecommunication companies, and electric utilities. It also engages in the development of residential condominium projects on the east coast of Central Florida. The company was incorporated in 1906 and is based in Melbourne, Florida.

website: http://www.goldfieldcorp.com/

News and Fundamentals

Goldfield just released amazing results on for its 4th quarter and full year 2005:
Links:
Goldfield Swings to 4Q Profit on Sales
Goldfield Records Strong Results for 2005

----------------
MELBOURNE, Fla., March 27 /PRNewswire-FirstCall/ -- The Goldfield Corporation (Amex: GV - News), a leading provider of electrical construction services in the southeastern United States and a developer of condominiums, today announced strong results for the year ended December 31, 2005:

   - Revenue increased 20.4% to $39.3 million from $32.7 million in 2004.
   - Operating income increased to $4.0 million from a $0.5 million loss in
      2004.
   - Net income rose to $2.3 million ($.09 per share) from a $0.4 million
      loss ($.01 loss per share) in 2004.

Results for the fourth quarter of 2005 mirrored the markedly improved yearly results. For the quarter ended December 31, 2005 (compared to like period in 2004):

   - Revenue increased 85% to $10.4 million from $5.6 million.
   - Net income reached $0.9 million ($.03 per share) from a $0.7 million
      loss ($.03 loss per share).
-------------

Crazy! GV has more revenue this year than mkt cap and is growing strong.  This makes GV an amazing value!!  Annualizing the quarter eps gives GV a forward PE of 11.5 not accounting for any growth.  There is even more!  Growth is backed up by a backlog of over 40million!

Looking ahead to 2006, Mr. Sottile commented, "We start 2006 on a very solid footing. At January 31, our electrical construction backlog had increased over four-fold to $24 million from $5.8 million at the same point in 2005 and our real estate segment's backlog had almost doubled to approximately $16.9 million from $8.4 million at the same point last year. The first phase of our new Pineapple House project is now under construction, with binding sales contracts for approximately two-thirds of the units. We expect to start recognizing revenue from this project during the first quarter of this year."
http://biz.yahoo.com/prnews/060327/nym042.html?.v=39

Technicals

A stock with this kind of fundamentals.. and superb technicals.    Notice on the Long-term chart  what a solid company we are dealing with.  How can we tell this from the chart?  Notice how there is a consistent rise and support with increasing volume on the 10yr chart.  Only really great management can pull that off.  Investors who are holding this stock must be in love.   (they bought in 1999 @ .20 and the stock is 1.38  )  These are investors who will not sell their position.

Trade Plan

We are buying this stock for both the 3SOF and 3SOV portfolio.  Therefore, we will trade the positions in a different manner.  The 3SOF method will be a much stricter technical method.  The 3SOV method will try to maintain a position until true value is attained through looser stops.

We have a breakout on GV and it will most likely attack the 52-week high soon.  We will place our initial stop around 15-20% away and will look to make a great return.  This stock is set to explode as soon as the word gets out.. Right now it is definitely a hidden wonder.

Check out the thread for his updates!

And GIGM cut through 10 like a knife through butter.  It was up 7% today.

I hope to have some more thoughts tomorrow – maybe something original.  Snowy

[eliteG]

Thx for the comments snowcat.    I hate to interrupt this thread with a reply.. but I must correct you.  On CHID Ramsburg was the man and picked it up @ .65 for the 3SOF team.  I followed his lead and yesterday had to add to the position big-time because the technicals were screaming!!  I have a feeling you made some green on GV too..    Excellent.  Carry on!

[snowcat]

eliteG -

Your analysis is a work of art - and you hit a home run or two a week.  Incredible.  You got a big fan here.  Anyone who does not follow your commentary is doing themselves a big disservice.  Your addition to the A-team makes 3SOF an invaluable tool.

If you started to contribute to the "Joke of the Day" thread, I would have to retire.

Keep up the great work.

Next time I will compliment Ramsburg. 

Check out IFO & MED.

Regards

Snowcat.

[Ramsburg]

Keep up the great work.

Next time I will compliment Ramsburg. 

No need CHID was just fruit of brainstorming and team work

My compliments to you, and congrats on this great thread ! (applaud)

[snowcat]

05/04/06
The only time you have too much fuel is when you're on fire – Air force saying

BRVO was on fire today.  Up 16%!  I now have to bring out my old BRVO pumps again.  It is up because some bill passed yesterday to remove soda, and sweet sugary soft drinks from schools.  Low fat, sugar-free Slammers are the answer.  Hopefully they can increase production and keep up with the demand.
http://finance.yahoo.com/q?s=BRVO.OB

COGO was on fire!  I said that this would be the next candidate for the IBD 100!  It had a big breakout today.  The only fear is that earnings come out on 5/9/06.  Up 8%
http://finance.yahoo.com/q?s=cogo

GLBL was on fire!  This is another top find by eliteG.  The oil service co. came thru with some A+ earnings and jumped 8%!
http://finance.yahoo.com/q?s=glbl

GV – notice how GLBL and GV have the "G" in common.  The electrical contractor was up another 8% today.  You will not see better numbers on a low priced stock like this!!!!
This can be a major buy for the long term!!  Up 10%
http://finance.yahoo.com/q?s=gv

The ethanol stocks all dropped about 8%.  Even Vince Carter has to take a rest once in a while.  XTHN fell below 11 and I sold some.

STRL continued to bounce back with a 5% gain and ERS had a MAJOR pullback, -16% on huge volume.  That would be a sign to take a profit if you were lucky enough to have held on this long.

Miners, NTO and TGB were up 5%.  Lots of concerns in the world – and some people would rather see their money in hard assets, I guess.

Think about what you are about to do.  And stop playing with your hair.  Snowcat

[snowcat]

05/05/06
Never tell the Platoon Sergeant you have nothing to do. – Unknown Marine Recruit

I had plenty to do today as the DOW had a massive gain and my two honeys, GIGM and GV fell on massive volume.

What to do.  What to do. – Well, you know the rules – any drop over 5% on crazy volume and I am out.  A 40% gain on GV and a 300% gain on GIGM is worth holding on to.  Earnings are out on GIGM on May 11 and I expect them to be great.  I plan to get back in.  It is just that the stock just fell 10% over the past 2 days and I would rather play it safe.

I have a theory that many investors do not watch the market all day and when they get home today and see these two dropped, they will put in sell orders.   We will see.

I have not mentioned my favorite Chinese stock for a while.  SBUX continues to amaze with great earnings, aggressive expansion and new ventures, like family movies and breakfast fare.  I got in at 32 and it is now near 40.  When children graduate from McDonald's, they go to SBUX for $4 coffee shakes.  And as Bill Maher says, "The more complicated the order, the bigger the A-hole".

It seems that the ethanol stocks fell yesterday on talk of importing cheaper sugar ethanol.  Is this not what got us in trouble with oil in the first place?  Corn is expensive, I guess, if you consider they can get $6.50 for a large popcorn at the movies – but what about switch grass?  Plenty of that around and the only buyers there are cows!  Look closely at STKL and MGPI for switch grass ethanol.

XTHN finally made a bounce.  It was up 7%!
http://finance.yahoo.com/q?s=XTHN.OB

BRVO continued to look good hanging on .80.

CHRS is getting closer to the magic number 15.  The clothing store for large women has been basing for the past several months.

Miners NTO, TCG and TCG moved well with the market.

One to watch for the weekend: new issue DK.  They are an Israeli company that owns many gas stations and convenience stores in the South East US.  There is a lot debt, but they are expanding like crazy.  http://finance.yahoo.com/q?s=dk

Today might be a sign of money moving into big caps as is done when people believe the economy is getting stronger.  Let us hope they are right.  And drink less soda.  Snowcat


The real story of Cinqo de Mayo is as follows:

Back in 1912, Hellmann's mayonnaise was manufactured in England. In fact, the Titanic was carrying 12,000 jars of the condiment scheduled for delivery in Vera Cruz, Mexico, which was to be the next port of call for the great ship after its stop in New York. This would have been the largest single shipment of mayonnaise ever delivered to Mexico. But as we know, the great ship did not make it to New York. The ship hit an iceberg and sank, and the cargo was forever lost. The people of Mexico, who were crazy about mayonnaise, and were eagerly awaiting its delivery, were disconsolate at the loss. Their anguish was so great, that they declared a National Day of Mourning, which they still observe to this day.
The National Day of Mourning occurs each year on May 5th and is known, of course, as Sinko de Mayo.

[snowcat]

05/08/06

If you see a bomb technician running, follow him. –USAF Ammo Troop

I was following the Ethanol group as it continued up.  The whole group: PEIX, XTHN, STKL, ADM & MGPI showed some good gains today.  PEIX is nearing 40 which is pretty rich for an earning less stock.

DIL, which makes enzymes that break down biomaterial into ethanol, had a great day, up 11%.  The nice chart makes the stock very buyable!
http://finance.yahoo.com/q?s=dil

GIGM bounced back a bit to finish near 10.  Earnings should be interesting this Wed.  GV continued its slide for the time being.

One thing that amazes me is how quickly stocks that I sell shoot up.  Airplane part maker, LDSH was 15 when I last mentioned it – it is now near 40!  RATE, the online lender was 5 and is now 50!  Even ICE, the Cabot pick that promptly dropped from 71 to 52 has promptly shot up again to almost 80 – all in a month!  You cannot sleep on this job.

I am going to try to be a lot more patient on some of these stocks. CHRS and LSI seemed to have bounced back.  IFO is on the way.  I think buying in small bits and adding as it passes resistance or bounces off a moving average might help avoid any disasters.  I have said this b4, and I am getting better at it.

Mr. Market likes airplane part supplier, LDSH. 
http://finance.yahoo.com/q?s=ldsh

Even with gas prices high, people will still take planes.  And have you ever been on a plane that was not crowded?  The price of fuel will give the companies reasons to upgrade to new, more efficient models.

He thinks this company is worth another $6.  He was right on with WIRE and BBD.  He is likely right with this one.  You can read his report at www.mrmarketishuge.com .  Ernie is trying to help raise funds for a local high school football team.  The school is cutting back the program due to budget cuts.  He is so confident of this pick, that when you make money on it, he would appreciate you sending a small donation to help the school's football program.  I am in.

Tomorrow I will post the whole report.  It is a first class analysis.

Remember to watch "24" tonight – we'll discuss it at the water cooler.  Snowcat

[snowcat]

5/9/06
"Don't draw fire; it irritates the people around you." – Your Buddies

There were lots of things irritating me today.   ABAX was down again – my floor on this one is 23.  It is a great company that makes portable blood analyzer machines that has not performed well stock-wise.  Be patient, right?  Well look at the chart of HRT – another great company that looked great and is now selling for corn chips.
http://finance.yahoo.com/q/bc?s=HRT&t=1y

MGPI was down on talk that President Bush may lift the tariff on sugar ethanol.  STKL was down probably on the article that mentioned that ethanol plays about a 1% role in this food company.  PCR, Cabot's stock of the decade, was down 5%.  At a closer look, the executive compensation is way excessive and they do not look good earnings-wise.

BRVO.ob was also down 5% while I am discussing things that irritate me and COGO which I think has great promise, fell on a good earnings report

Anything good happen today?

ADM was up $2 to blast through 45, which was good.  Also IFO which I loaded the boat on last week was up 19% as their earnings rose.  I think that this stock, which was a big winner a few months ago, will be a big winner for us again.
http://finance.yahoo.com/q/ecn?s=IFO

Other nice gainers today – HANS now has a target of $205 by some analyst, so it shot up.  And LBIX and JSDA, I guess followed up on its coat-tail.

Stay positive and diversified.  Snowy

[snowcat]

05/10/06
Mankind has a perfect record in aviation; we never left one up there!

I got rid of ABAX – just way too late.  It took a 10% dive this morning that took away all my profits.  That is the price of being patient.

Washington said it is unlikely that it will lift tariffs on foreign ethanol.  In upstate NY, they are converting an old Miller Brewing plant to produce ethanol.  This should soon be popular.  How long b4 Bud starts making ethanol?

IFO continued up from yesterday's good earnings news.  It was up 7% today on strong volume.  I see some good upside to this one.
http://finance.yahoo.com/q?s=IFO

Today I bought some IRIS and COGO on the good earnings reports.  COGO bounced back nicely after yesterday's earnings swoon and IRIS was up 23% on good earnings.  IRIS, which does urine analysis stuff was at 25 seven months ago, took a major dive to 10ish and may get back on track with this earnings report.
I can see these both as IBD 100 material in time.
http://finance.yahoo.com/q?s=iris
http://finance.yahoo.com/q?s=cogo

CUP up 20% on high copper prices.

Mr. Market really must want donations to help his kid's football team.  LDSH was up a buck today.  Please look at this report.  I am not pumping Mr. Market, but his record speaks for itself.  Following his investments will make you a better trader.  Enjoy, Snowy

On Friday, May 5, I bought Ladish Co (LDSH) at 38.57.  I will sell it in 4 to 6 weeks at 44.74.   Please note I will not be sending out a "sell notice" email on LDSH since this is a "bonus" $$$MR. MARKET$$$ pick and was not sent to the entire membership.

Here's why I like LDSH:

Ladish is up about 300% from its 52 week low.  It's PE of 29 does not reflect the enormous growth opportunities ahead of it.   LDSH sells at a 44% premium to its book value but is cheap compared to its industry and growth prospects.   We'll find out why:

Ladsih makes hundreds of different parts for just about everything that flies (with the exception of birds and bugs). 

Ladish Co., Inc. engineers, produces and markets high-strength, high-technology forged and cast metal components for a wide variety of load-bearing and fatigue-resisting applications in the jet engine, aerospace and industrial markets. Approximately 89% of the Company's 2005 billings were derived from the sale of jet engine parts, missile components, landing gear, helicopter rotors and other aerospace products. Approximately 27% of the Company's 2005 billings were derived from sales, directly or through prime contractors, under United States government contracts, primarily covering defense equipment. The Company is the second largest supplier of forged and cast metal components to the domestic aerospace industry, with an estimated 20% market share in the jet engine component field.

The Company markets its products primarily to manufacturers of jet engines, commercial business and defense aircraft, helicopters, satellites, heavy-duty off-road vehicles and industrial and marine turbines. The principal markets served by the Company are jet engine, commercial aerospace (defined by Ladish as satellite, rocket and aircraft components other than jet engines) and general industrial products.

Ladish offers one of the most complete ranges of forging, investment casting and precision machining services in the world. Consequently, Ladish is often called upon to forge the largest, most complex aerospace and industrial components for a number of the world's toughest applications. The operation is a pioneer in the application of advanced technology to the forging process and today achieves products with precise and sophisticated mechanical properties.

The Company employs all major forging processes.  Much of the Company's business is capital intensive, requiring large and sophisticated forging, casting and heating equipment and extensive facilities for inspection and testing of components after formation. Ladish believes that it has the largest forging hammer and largest ring-roll in the world at its plant in Cudahy, Wisconsin.  Much of the domestic forging equipment has been designed and built by Ladish.

The Company's top three customers, Rolls-Royce, United Technologies and General Electric, accounted for approximately 56%, 52% and 52% of the Company's revenues in 2003, 2004 and 2005, respectively.  Half of its sales are in the US and the other half is International.

Herman W. Ladish founded the company in 1905 with the acquisition of a 1,500-pound steam hammer and they have been supplying aerospace needs ever since then.  Ladish has established links with virtually all of our suppliers and customers for the electronic interchange of data of all types, for example: engineering, accounting, administrative, customer service and marketing information. These established links enable the rapid transfer of critical information to support day-to-day activities, as well as aid continuous improvement activities across all of our operating units, particularly efforts in such areas as cycle time and inventory reduction, and insuring the accuracy, completeness and timeliness of data transactions of all kinds.

The company is divided up into these business units:

•   Pacific Cast Technologies (PCT) supplies commercial, military and aerospace OEMs with airframe, launch vehicle, and turbine engine structural components. Specializing in investment cast titanium parts exclusively, PCT has developed a fast, reliable process for manufacturing the industry's most advanced, complex, large-scale, near-net-shape castings.

•   Cudahy Forging supplies highly engineered, high-strength forgings to aerospace and general industrial customers. The operation is the second largest forging facility in North America, employing 700 workers.  Cudahy Forging ranks high in customer satisfaction  with short production cycle times, highest-quality forgings, comprehensive engineering support, quality certifications.

•   Ladish Diecast Tooling was founded in 1973. The operation manufacturers shot-end tooling exclusively for aluminum and zinc diecasters. Diecast Tooling is a fully integrated supplier with in-house heat-treat and casehardening facilities. Diecast Tooling serves many of the largest diecasters in the United States, meeting the needs of a customer base that extends from coast to coast.

•   Stowe Machine Co., Inc. supplies precision machining services, primarily to the aerospace industry. The company specializes in performing the finish machining operations on large and small complex components.


A nice story to be sure but how does it translate into making this company profitable and, ultimately, making its stock price go up?  Fundamental changes in the industry which it serves bode very well for Ladish. 

LDSH, on April 25,  reported 2006 first quarter sales of $95.0 million in comparison to $65.1 million of sales in the first quarter of 2005. The Company reported net income of $7.632 million, resulting in diluted earnings per share of $0.54 for the first quarter of 2006, versus a net income of $2.658 million or $0.19 per share, in the same period of 2005.

What pushed these results was the gross margin of 18.3%, nearly double the estimates.   At year end 2005, LDSH had a record backlog of $450 million (highest in their hundred year history).  This backlog was surpassed in the most recent quarter, growing to $503 million (over one year of revenues!).  This means that new orders are growing at over 18%.  Their second quarter should be equally strong.

How can I be so sure?  Just look up (and over).

The South Indian states of Andhra Pradesh, Kerala, Tamil Nadu and Karnataka are expected to experience a 25-30% growth in domestic air passenger traffic in '06, while the growth in international traffic from the four states is likely to be about 20% per annum, as per a recent study by the Centre for Asia Pacific Aviation.   

This will be much higher than the national growth forecast, pegged at 25% per annum in case of local travel, and around 15% for global traffic out of India.
Frontier Airlines reported a 27 percent surge in passenger traffic in April 2006, as occupancy increased along with capacity. Miles flown by paying passengers hit 707.7 million, up from 557.3 million a year ago.
The number of seats Frontier offered for sale grew 20.1 percent to 877.4 million from 730.4 million a year earlier. The Denver-based carrier also said its planes were nearly 80 percent full, compared with 76 percent during the same month last .

When was the last time you were on a plane?  When was the last time that plane wasn't crowded.  The industry is underplaned.  We need more planes.  The growth in the industry that was coming pre-September 11 was pushed back to 5 years later..pushed back and compressed.  The reduction in demand 5 years ago was an artificial reduction.  The true demand is getting back to normal, and the airlines are way behind.  Globally demand is growing 8% per year.  That's a lot of new fannies that need seats.

Combine this with the fact that energy costs are spiraling to new highs means that airlines can justify replacing older equipment with newer energy efficient equipment.  All of this adds up to more and more demand, and revenue growth, for LDSH.  Confirming this is the fact that 2005 was a record year for all commercial aircraft orders.

Also, with the increase in metals and materials costs, LDSH is able to pass these on to their customers (along with their 18% margin).  Higher prices mean bigger gross margins.  Even though these higher revenues come from inflation, these increased sales allow LDSH to absorb their fixed costs which contributes to greater earnings.

A substantial portion of the Company's revenues is derived from long-term, fixed price contracts with major engine and aircraft manufacturers. These contracts are typically "requirements" contracts under which the purchaser commits to purchase a given portion of its requirements of a particular component from the Company. Actual purchase quantities are typically not determined until shortly before the year in which products are to be delivered.

LDSH's  backlog declined by approximately 20% following the terrorist attacks on September 11, 2001. Following these terrorist attacks, the commercial aerospace market experienced a significant downturn worldwide. The global commercial aerospace market continued to soften in 2002 and the first half of 2003. The Company's backlog experienced an upward trend in the second half of 2003. New order activity was strong throughout 2004 with the Company receiving $266 million of new orders in 2004 in comparison to $206 million of new orders in 2003. In 2005, the Company received approximately $434 million in new orders as the commercial aerospace market continued to expand.   Ladish's backlog is an indicator of growth potential ahead. 

What about competition moving in?  Tthe significant investment in tooling, the time required and the cost of obtaining the status of a "certified supplier" are barriers to entry. Competition is based on quality (including advanced engineering and manufacturing capability), price and the ability to meet delivery requirements.   If you were Boeing, would you trust your plane to the new guy on the block? 

An important benefit to Ladish of these new aircraft orders is the performance capabilities of their advanced jet engines which caters to Ladish's product offering.

Ladish is responding to these demand signals.  They bought the ZKM forging company in Poland last year and Ladish will use their insight and contacts to expand the mature ZKM business.

Ladish also bought Valley Machining which will help Ladish accommodate the growing demand for machine services. 

A recent decision to invest in a new isothermal press is an appropriate response to market demand and will keep Ladish in the forefront of aerospace forging.

So how does this translate into earnings going forward?  ANAL-ysts say that Ladish will earn $1.83 in 2006 and $2.28 in 2007.   $$$MR. MARKET$$$ thinks that this is kind of ridiculous, considering that LDSH already earned $0.54 in the first quarter and that they will likely earn $0.60 in this quarter.   LDSH will earn $2.14/share in 2006 on revenues of $350 million.  In 2007, they will earn $2.63/share.  If you take their PE of 29 and multiply it by $2.14/share, you get a share price of $62.06 which is well past my sell price.

LDSH's balance sheet is in very good shape, with a LT Debt to Equity ratio of only about 22%, which is well below industry averages.  The age of the company has gone a long way to enabling them be able to pay off their property and equipment over the years.

Here's what the boss had to say, this year and last year:

"The 46% sales increase in the first three months of 2006 compared to the first quarter of 2005 is due to the continued improvement of the jet engine and aerospace industries, a full quarter of ZKM sales and the overall strengthening of the economy," says Kerry L. Woody, Ladish's President and CEO. "Due to increased sales volumes, higher prices for by-products and better cost absorption from incremental sales growth along with cost reductions, the Company's operations improved in the first quarter of 2006 as gross margins were 18.3% in contrast to 11.2% in the first quarter of 2005. All of our operating units contributed to the improvement in first quarter 2006 results and were ahead of expectations."

Looking forward to the remainder of 2006, Woody remarked, "Under the current conditions we see the sales opportunity continuing to improve this year and we expect a more balanced product mix going forward, although we expect a decline in missile and rocket component sales from the 2005 level. We had a backlog of $502 million at the end of the first quarter of 2006 in contrast to $332 million at the end of the same period in 2005. The recovery of our industry is clearly under way and we expect it to continue. As our markets expand, our priority will be on responding to our customers' requirements while simultaneously working to improve our internal operating efficiencies, assuring availability of critical raw materials and managing the growth of our working capital."

"2005 was a milestone year for Ladish.  It was gratifying that we could celebrate the company's 100th anniversary in a year that featured sustained profitability, record-breaking order activity and sales backlog, and a strategic foreign acquisition," says Kerry L. Woody, Ladish's President and CEO.  "Ladish's $266.8 million of sales in 2005 represented a 28% increase over 2004.  Correspondingly, 2005 net income of $13.7 million reflected a 265% improvement over the prior year," noted Mr. Woody.  "The sales growth we experienced in 2005 is attributed to the expanding international aerospace market along with a robust demand from our industrial customers."

"We are optimistic about the opportunities available to Ladish in 2006.  With a contract backlog of over $450 million, Ladish has the ability to continue to improve its performance through the incremental sales growth.  During fiscal 2006 Ladish will begin the process of moving ZKM toward the aerospace arena.  We also expect to capitalize on the skills and capacity growth provided by the acquisition of Valley Machining," observed Mr. Woody.  "With the known and projected growth in the aerospace markets served by Ladish and our participation in key programs such as the Rolls-Royce Trent family of engines and GE's engine programs, we are excited about Ladish's prospects for both the near and long term."

Thanks again for reading about our local benefit for the Princeton High School Football Booster club.  I plan on donating a percentage of my profits in my LDSH trade to the Booster Club.  If you like this pick, and decide to play it yourself, could you consider doing the same and putting a small percentage of your profits back to this worthwhile cause?  Remember, I only sent this pick out to you who responded to me.   I offer this whole website as a free service to interested readers. 

All of the information you need for your donation is right here:

http://hometown.aol.com/EBarsamian/football+golf+rev2.doc


Thanks

$$$MR. MARKET$$$

www.mrmarketishuge.com