Yes you read that correctly. I still believe a dollar invested in EZCorp (EZPW) will earn 33 times that of a dollar invested in America's sweetheart Apple Inc (AAPL). Of course anyone can make any proclamations that they want. Few dare as I have to post the results when they are not favorable as I have over the past five years.
Today however, I will not be swallowing my pride as EZCorp, a leading pawn shop and cash advance company, has indeed out performed the tremendously successful Apple since the original story. It is worth mentioning to those that would point to Apple's ten-year run that EZPW was the better stock over the long haul as well.
There have been many lessons to learn from the "Great Recession." But while the message is often clear, we can't always muster the courage, discipline or consensus to act on these lessons.
The National Basketball Association (NBA) is about to enter its second season -- the playoffs. And for a Laker fan in Los Angeles, there is much to look forward to. However, the current NBA collective bargaining agreement will end and we will have to witness another battle between the billionaires and the millionaires.
Why can't the NBA learn from other businesses that have successfully maneuvered through economic turmoil to achieve profitability?
Normally, if I said a business was underwater, investors would think the worst. Actually, in the summer Noble Corp (NE) was underwater -- and investors were not impressed. However, this was a great buying opportunity, and although the company is still underwater, it is also a market leader among my stock picks and the overall market -- even among oil industry players. With its fleet of 69 offshore drilling rigs, Noble stands tall.
A few years ago, in 2007, prior to the economic meltdown, Sirius was having a meltdown of its very own. Trading between $6 and $8 a share for most of 2005, it slid from $6 a share to $4 a share in 2006. By 2007 it was trading in a much tighter range between 3.50 - $4.00 and there were those that thought it might be a good buying opportunity.
This question was posed to me by friends that owned the stock and were considering buying more. I suggested they run. History shows that to be a good call. However, many investors, or at least traders that follow the stock made good money after the collapse picking up shares for pennies. I was not one of them, so props to those that jumped in -- I was making similar moves elsewhere.
After numerous world calamities, Buffett's focus on insurance companies, and the fact that many hedge funds seem to be heavily focused on banks and neglecting insurance companies -- with the exception of Bruce Berkowitz -- I decided to explore the possibilities.
Even though we can anticipate billions of dollars in claims there still are buying opportunites.
The other shoe hit the fan Wednesday when Newcastle Investments (NCT), one of my up-and-down picks for the year announced the pricing for a 15 million common share stock offering -- six bucks! -- considerably lower than the 52-week high of $8.85 the stock reached last month.
NCT closed Wednesday March 23 at $6.02.
In making this move, management seeks to raise $85.6million for future investments and operations. This is the management that guided the company back from the grave. I know, since I bought in at 60 cents. But with 62 million shares outstanding, the 25% dilution is a huge move. What are they thinking?
For almost three years I have been touting a EZCorp (EZPW) stock that just keeps rising, and I believe is still under valued. Way undervalued. Before I continue let me make it clear I own the stock personally and in my investment company's portfolio -- still eating my own cooking. The initial shares have a cost basis of $11.80. EZPW opened at $29.20 today and is trading higher.
Yesterday EZCorp announced the acquisition of a majority interest in it's Australian partner: EZCORP to Form Global Strategic Alliance With Cash Converters. This expands the global reach of both businesses, increases the range of services, and should also improve efficiency in a broad number of areas.
Do you have any interest in insurance companies amidst the turmoil, disaster and current crises in Japan? A crises that followed so closely on the heals of the destruction of the New Zealand city of ChristChurch by a 6.3 magnitude earthquake. Perhaps you think this is even a poorer idea than catching that proverbial falling knife we are always hearing about when stock prices are collapsing.
Certainly there will be billions of dollars in claims. On the other hand, perhaps the burden will be spread around the globe to reinsurer's such that none is struck too hard and this is a buying opportunity. After all, when the dust settles, insurers will cry for mercy, and in particular, rate increases. It is also likely those that never saw the need for insurance have been awakened and demand will increase.
More evidence of this abounds: Wednesday March 2, (Reuters) - US-based Berkshire Hathaway aims to enter the Indian insurance sector as a corporate agent of Bajaj Allianz General Insurance.
This is part 1 of a series examining the insurance market for expansion, stock valuations, potential risks and opportunities, excluding health care focused companies, a whole other breed of enterprise.
The Chinese government released trade data that portrays a $7.3 billion deficit. Is that believable or just convenient amid the international pressure to raise the value of their currency? We can hardly believe what comes out of Washington, so data coming out of China has to be quite suspect.
I'm sure they retained qualified independent auditors to ascertain the validity of the figures -- yeah right ...
"My pal Warren" has said for years that we should buy on fear and sell on greed. The toxic stock portfolio was a result of this sentiment.
This is the fourth update to my ranting eight months ago that acquiring six of the most hated, and most highly traded stocks with constant negative headlines would outperform the overall market. The theory has born fruit as the toxic stocks are ahead and the difference is increasing over time.
When dealing with large companies, have you ever felt you were living through a scene from a Seinfeld episode?
In January Wells Fargo (WFC) completed a majority of its integration with Wachovia, and I fear it will take years working out the bugs in the system. I say this because I am a major client, shareholder and trader dealing with the company on numerous levels, and the past few weeks would be comedic if not so infuriating.
Yesterday, March 8, HCII reported it's 13th straight quarter of profitability with Q4 earnings of 27 cents per share versus anticipated earnings of 14 cents.
At the time of the initial post HCII was $8.08. It was $8.50 at today's opening and has been hovering around that mark most of the trading day. That equates to a 5.19% gain in 9 weeks (30% annualized).
On Wednesday March 2, this investor threw in his two cents worth (see:Serious Money: What Should Warren Buffett Do Next?) discussing possible acquisitions. Since all the "pro's", I use the term loosely, have had a say I thought I would give readers a chance to express some of their ideas too.
Last Friday Warren Buffett said he was anxious to pull the trigger on another large deal -- having only recently completed the Berkshire Hathaway (BRK.A and BRK.B) acquisition of the Burlington Northern Santa Fe Railroad. Since then, prognosticators far and wide have been making suggestions about his next possible moves.
Considering I wrote about the railroads the day before the BNSF announcement, I thought I would share a few ideas, old and new.