Author: Yale Bock, Y H & C Investments
Covestor models: Long Term GARP, Concentrated GARP
Disclosure: Long GIGM, DGI, CLGX, CASS, DLB, JMBA
February was a good month for the model as a few of the companies saw a modest rise in their stock prices. The portfolio is still down a great deal, but I believe 2012 could prove quite interesting for several of the holdings. Already, we have seen a few reasons why results could be vastly different. At the same time, there is no denying the returns have been bad. As Bill Parcells says, “You are what you are. Until the performance changes.”
Here is an update on some of our holdings.
GigaMedia (GIGM): At least the management at this company keeps it interesting. For the third year in a row, we have a new CEO, with a nice background in Silicon Valley and plenty of technology experience in gaming. Of course, time will tell and we all know not to get too excited about (GIGM). Management announced they will take a large write down in the fourth quarter. In addition, they have been selling off studio assets and stakes in some publicly traded partners in South Korea. The company has a cash position of close to $100 million dollars and the CEO is evaluating the company’s business lines and will have more to report later in March.
Digital Globe (DGI): The company announced earnings and the stock got slaughtered. I actually don’t think the report was that bad, in fact revenue growth was pretty good. Investors are concerned about a reduction in reimbursement from the U.S. government.
Corelogic (CLGX): The company reported better than expected earnings, and the stock jumped a bit. Also, an investment management group is not pleased with management and seeks to nominate new directors.
Cass Information Systems (CASS): Reported better than expected earnings on January 26, 2011 of 0.53 cents a share for the 4th quarter of 2011– and $2.21 per share for the entire year. Revenues increased almost 11% for the year, with EPS up 13.3%
Dolby Laboratories (DLB): Earnings report on January 31, 2011 showed revenue for the 4th quarter of 2011 at $233.4 million, down 3.8% from the same quarter in 2010. EPS came in at 0.67 a share, down from 0.76 cents a year ago.
Jamba Juice (JMBA): The company reports earnings on March 7, 2012, and the stock has had a nice move already. I think there may be more gains. The company announced it is buying Talbot’s Teas, which is distributed on online shopping site QVC and at some high-end hotels. The company is adding to its product line of healthy food beverages. In addition, Jamba added another product for distribution regarding its consumer products growth, or CPG, initiative and negotiated a new credit line to take advantage of the current low interest rates.
