Mystery Stock Picks - Wall Street's Hidden Secret

Get ready to make money when fear grips the market

2011-08-07T20:58:00.000-07:00

Banking stocks are taking a hit, especially Bank of America! We don't know what's going to happen there and we all hope BoA survives this mess, especially since BoA partly saved the world from the financial crisis by taking in Countrywide. Trust me, if you knew the back story, you'd appreciate the sacrifice.

But there are quite a few jewels out there that's performing. They have paid off their govt bailout debts, decent earnings, and will likely out perform in the long term (3-5 years). Banks like JP Morgan.

While no doubt the banking sector will take a hit Monday morning, this is when smart investors actually bring capital into the market and buy low...then sell high. Funny concept, right?

I'm buying JP Morgan on Monday's session and it's running around $38. Cheap. Check the fundamentals.

Stock tip: Why Microsoft is hot again (MSFT) -- Facebook, Skype, Bing

2011-07-07T04:38:00.000-07:00

Google's been drawing battle lines against Facebook, and in response Facebook allied itself with Google's main nemesis: Microsoft.

Facebook's relationship with the Microsoft's Bing team and now video chat through Skype is an effective partnership that makes sense. Video chat has been Skype's bread and butter and tying it up with a social network of 750 million people automatically lifts Skype from a dying platform to a de facto monopoly, with Microsoft benefiting the most out of this partnership.

The ability to monetize this is still "cloudy", but what it does mean is additional users and access to a platform (Facebook's social network) that Microsoft was never really good at. Plus the fact that Microsoft is still a cash cow in its legacy line up (Office, Windows), this makes Microsoft's stock extremely attractive long term.

I'm buying more Microsoft today!

Turmoil in Egypt and Middle East - chance to invest?

2011-02-18T13:16:00.000-08:00

There are several ways you can invest in the Middle East without having to leave your house.

First, let's talk about Egypt. It's the gate keeper of the Suez Canal and all of the economic activity that passes through there they take a piece of the pie. Not to mention its energy reserves and tourism dollars -- which recently have been hit by the turmoil behind non-violent protests for Mubarak's removal. Now that it has some decent stability with the military promising democratic elections within six months, investors should take a look at NYSE: EGPT as a potential investment now.

A much older and more "aged" choice is the Middle East's premier ETF which is NYSE: GULF. Like the Egyptian ETF, it continues to be challenged with recent protests and negative news in the region. Yet the truth of the matter is, most of the allocation for GULF is based in Qatar, Kuwait, UAE, and other players that are "more stable" than the rest of the countries. The focus on telecommunications in these emerging countries also is a different strategy than solely depending on energy.

At the end of the day, the question whether to invest is your belief on whether the Middle East will get back to "normal". If your position is long term, it looks like it will. If your position is short term, your money will not be earning anything for a while.

Don't buy gold right now

2010-12-04T20:32:00.000-08:00

In the past couple of years I've always commented positively about gold. Investors flock to them when the economy is in the pits. But the world tackling debt problems in Ireland and Greece head on, with the Feds printing money to get more "stimulus" in the U.S. and global economy, we are coming to a point where the global economy is climbing slowly out of the darkness of recession. And this means only one thing -- reinvestment of capital elsewhere and gold will be dumped.

You have been forewarned. If you bought in low, you are fine, but if you have bought in about $1200 per ounce, get ready for a correction. It's coming in 2011.

South Korea an opportunity to invest: SK Telecom

2010-05-28T02:42:00.000-07:00

Recent fears of fresh tensions between North and South Korea have created panic in the South Korean stock market. While this is temporarily inconvenient for investors, it is actually an opportunity for others that have not even touched the South Korean market.

But you don't need to go to Seoul to invest money in the country. You can purchase South Korean stocks in the NYSE. For instance, SK Telecom (NYSE:SKM), which has roughly a 50% market share in the wireless telecom market, is currently 15% cheaper than what it was several weeks ago. Why? Not because the company had any fundamental flaws, but because of fears of war.

Will North and South Korea actually blow each other up? The answer is no. Most of it is being resolved through the United Nations and punitive sanctions. Once the general market realizes that the region is stable, the 15% discount on SK Telecom will quickly disappear.

This is the reason why I'm definitely looking at SK Telecom. A brief study of their history and moves show they're not scared to even invest outside the market, such as their brief stint at running Helio, which was taken over by Virgin and ultimately Sprint.

Stock Pick: PLDT (again!) because of Philippines elections

2010-05-11T08:06:00.000-07:00

Slightly over a year ago, I predicted that a long term hold on PLDT was wise. It is trading as ticker symbol PHI on NYSE.

Back then, it was priced at $46.95 a share. It was roughly $60.34 one year later. Not counting the extra dividends, let me break it down if someone bought 1000 shares during that year to year period. The $46,950 investment would net $60,340, or a $13,390 profit in roughly a one year period. In short, a 28.5% annualized return on investment.

But why PLDT again?

But why am I highlighting PLDT again? The stock price is now around ~$55 USD. Isn't it too expensive? In my opinion, it's cheap. Aside from their performance and monopoly-like control in all things related to communications, their stock price is dependent on the following:

The Philippines' geopolitical stability.
Strength of the peso.

The Philippines election and geopolitical stability

There is increased likelihood that the peso (and subsequently PLDT's stock price) will continue to strengthen because the Philippines presidential election was successfully held and a pro-business candidate was elected.

Strength of peso, falling dollar, the blessings of OFW

Despite the recession last year where the U.S. had a -2.4% GDP and Southeast Asian neighbors like Malaysia had a -2.8% GDP, the Philippines managed to inch out in the positive territory with 0.9% growth.

Most analysts familiar with the country's dynamics can point to a high number of overseas foreign workers (OFW) that remit billions of dollars a month as the key success factor in keeping the economy afloat. Almost 20% of the Philippines' working population is overseas.

Morgan Stanley and other analysts are estimating that this year, the country will have a $4 billion surplus in its balance of payments,a record of all monetary transactions between a country and the rest of the world. This surplus, in a global economy that's still recovering, is a huge indicator that the peso will continue to rise against other currencies.

In short, with all things considered, the Philippines and subsequently, PLDT, look like they have bright futures ahead.

BP a value stock because of oil spill?

2010-05-05T07:44:00.000-07:00

(Public, NYSE:BP)

BP has lost 17% of its market value since the oil spill. While there's a lot of emotion surrounding the current oil spill issue and as a lover of the Gulf of Mexico (I love fishing for snook), I have personal feelings about BP's oil well ruining my favorite fishing spots and hurting the tourism industry of Florida.

Nonetheless, the company has said they are willing to pay for all for the damages and help restore what was damaged. With the amount of money and political pressure that's going to come from this fall out, this short term problem might be have long term benefits to the Gulf states. For one, I doubt they'll approve anymore additional oil drilling until there's new technologies and safeguards developed. Second, it will serve as a warning to everyone else to have safety checks on their oil rigs and more federal scrutiny.

We will see how this plays out in the next few years after a decade of legal rambling, but these types of mistakes do drive innovation and safety measures to better our nation.

What is sure though is that the world is running out of oil and BP still has wells around the world and in the long run we will still all use its oil.

It's the third largest energy company and the 4th largest company in the world. While the potential damage estimates go up as high from $3 billion $28 billion, BP will continue to help lead the world in delivering the goods: energy and oil.

In short, BP looks very attractive for a medium term buy.

Adobe a stock pick? I think so. A quick analysis.

2010-05-02T06:08:00.000-07:00

Believe it or not, I think there's money to be made in Adobe despite the public (and very strange) Apple fiasco.

Not so much because Apple is rejecting Flash and that HTML5 is coming to the horizon, but because Adobe is an innovative company. They still have cash cows with Photoshop, Premier, and other products.

Hands down they are the industry leaders in image editing, video editing, and with the new CS5 launch, they continue to solidify that position.

According to Google's YTD analysis on the stock, the stock's been getting a beating, a severe one due to the recent spat with Apple. But I'm seriously looking at this stock. For a few reasons:

It's cheap, compared to what it was earlier this year.
It has other products that are not dependent on Flash. In my opinion, it's well diversified. (Take at the revenue breakdown below.)
While HTML5 might be a danger to its Flash player -- what stops Adobe from creating the best HTML5 player out there? That's right, they can still own that market and have the experience to do so! They can leverage their current relationships with operating systems and browser developers.
They are a trusted brand name.

FISCAL YEAR ENDING

30-Nov

2007

2008

Revenue - Total products revenue

3.02B

3.40B

Revenue - Enterprise

191M

253M

Revenue - Creative Solutions

1.90B

2.07B

Revenue - Knowledge Worker

729M

811M

Revenue - Mobile and Device Solutions

52.5M

113M

Revenue - Platform

80.9M

118M

Revenue - Print and Publishing

206M

212M

In short, being at the leading edge at streaming video doesn't necessarily have to be a negative if there's an open source technology standard out there threatening your current innovative product (Flash). You could simply use HTML5 -- no one owns it, no one licenses it, so use the resources you have to own the market.

Easier said than done, I know, but I believe with Adobe's resources and strength, I'm pretty sure they have a fighting chance to develop the next streaming video technology.

What are your thoughts?

Obama's H1N1 national emergency declaration and making money out of it

2009-10-24T22:00:00.000-07:00

President Obama recently declared that the H1N1 swine flu virus is a national emergency. This gives the administration martial law-like authority to setup measures to proactively protect Americans from the virus in case of a serious outbreak, including stockpiling a significant amount of swine flu vaccines and being able to open quarantine centers to isolate infected Americans even if they object.

The vaccine orders will also profit someone.

This is why I'm choosing Novartis AG as a short term buy, holding for a quick bump in Q4 2009 and Q1 2010 profits. Obviously, the question to hold the stock pass those two quarters is dependent on the world's ability to prevent outbreaks.

Gold -- is the keyword.

2009-01-23T08:53:00.000-08:00

With Obama's Treasury pick calling out the Chinese on currency manipulation, talks of the dollar falling apart has been louder and louder. Why? Because of our debt.

The U.S. government's spending spree to pay for wars and do loan bailouts are going to cost us. Countries like the Chinese have been buying U.S. debt. However, if the Chinese were to suddenly stop buying U.S. debt -- it would essentially cut our ability to repay our obligations.

This is why I'm buying NYSE: GLD [SPDR Gold Trust]. At 87.98, it's going to be a bargain. If the Dow continues to hit below 8,000 -- the dollar will continue to feel pressure and gold and other metals will continue to spring up as investors flock to metal commodities.

Steve Jobs takes a leave of absence

2009-01-16T08:40:00.000-08:00

As reported by the Wall Street Journal, Steve Jobs is taking a medical leave until the end of June due to worsening health issues. Mr. Jobs said in an email to employees that he would be handing over the reins of the company temporarily to Tim Cook, Apple's chief operating officer, who filled in for Mr. Jobs when he took a leave in 2004 to battle pancreatic cancer.

We wish him well! As the market reacts and continues to drag the shares price, looks like Apple shares will be a bargain buy at $80's range.

Going to be buying (more of) it at $81.16.

Steve Jobs has a hormone imbalance, not cancer

2009-01-05T05:31:00.001-08:00

Steve Jobs doesn't have cancer!

Expect Apple to go up several percentage points today as Steve Jobs announced his health illness is not related to cancer but related to a hormonal problem. This will certainly reassure investors as hormonal issues, specifically on how to gain weight back, is a simple problem to fix. “The remedy for this nutritional problem is relatively simple and straightforward,” Jobs said.

For my MSP performance portfolio, I'm doing a buy rating at 94.44 today.

Stock Pick: United States Oil Fund (NYSE: USO)

2009-01-01T12:22:00.000-08:00

Am I nuts? With oil dropping to one of its lowest points in years, why in the world would I be buying United States Oil Fund? (I will be when the market opens.)

1/1/09 Price Per Share: $33.10

Description
United States Oil Fund, LP (USOF) is a commodity pool that issues limited partnership interests or units that may be purchased and sold on the American Stock Exchange (the AMEX). The Company invests in futures contracts for light, sweet crude oil and other types of crude oil, heating oil, gasoline, natural gas and other petroleum-based fuels that are traded on the New York Mercantile Exchange (NYMEX), International Currency Exchange (ICE) Futures or other United States and foreign exchanges (collectively, Oil Futures Contracts). It holds interests in other oil-related investments such as cash-settled options on Oil Futures Contracts, forward oil contracts, and oil-based over-the-counter transactions.

Trends in Recession
Bear with me so I can break the reason behind this pick. Oil is low now -- but the supply and demand cycle will look entirely different in 2009 and 2010. USO lost 56% its value in '08 largely matching the decline of oil prices but could potentially gain all of that back and then some if OPEC continues to drop production, if the global economy picks up steam in late '09 and 2010, and if we continue to have "peripheral" issues that affect oil prices: problems in the Middle East, piracy, etc.

Summary
At $33.10, knowing the potential turn around of the economy and the spike in demand in the future, at this price, it is a bargain.

-Don

Stock Pick: Philippine Long Distance Telephone Co (NYSE: PHI)

2009-01-01T11:39:00.001-08:00

Philippine Long Distance Telephone (NYSE: PHI) is a good mid to long term buy for me, a stock I continue to hold and invest in.

1/1/09 Price Per Share: $46.95

Company Description
Philippine Long Distance Telephone Co (PLDT) is the Mama Bell of the Philippines. It is one of the most diversified telecommunications company in Southeast Asia and almost runs a fixed line monopoly in the Philippines.

PLDT operates through three segments: Wireless, Fixed Line, and Information and Communications Technology. The Company offers a range of telecommunications services to approximately 32 million subscribers in the Philippines. The Company is a fixed line service provider in the Philippines with approximately 59% of the total reported fixed line subscribers as of December 31, 2007. Smart Communications, Inc. (Smart) it’s wholly owned subsidiary, is the cellular service provider, with approximately 37% of total reported cellular subscribers as of December 31, 2007.

Trends in Recession
PLDT met its target for cellular subscribers in 2008. It operates under the SMART brand name. This, with its steady cash flow from a near monopoly of fixed line subscribers and DSL service, continues to put PLDT as a solid market leader in the Philippines.

One of the best run and most respected companies in the Philippines, PLDT also pays $1.50 per share price as a dividend.

Summary
The Philippines is one of the few countries that is not in a recession, thanks large in part to its global imprint with overseas workers. There is roughly 2,500 Filipinos that leave the country every day to work abroad. The remittances being sent from this Filipino diaspora accounts to roughly 10-15% of the country's GDP, with 2008 being a record year. PLDT and other companies directly benefits from this.

-Don

Stock Pick: Archer Daniels Midland Company (NYSE: ADM)

2009-01-01T06:35:00.000-08:00

Archer Daniels Midland Company (NYSE: ADM) is a good mid to long term buy for me, a stock I continue to hold and invest in.

1/1/09 Price Per Share: $28.83

Company Description
Archer Daniels Midland Company is primarily a business to business provider. They are a leader in procuring, transporting, storing, processing, and merchandising agricultural commodities and products. They are a processor of oilseeds, corn, wheat, cocoa, and other feedstuffs, and is a manufacturer of soybean oil and protein meal, corn sweeteners, flour, biodiesel, ethanol, and other food and feed ingredients.

Trends and Recession
From renewable energy to vegetarian trends to soy milk to the box of cereal in your house, ADM is heavily involved in making sure companies can manufacture and deliver those products to your home by providing the essential ingredients or components.

While the price of commodities and other external factors will affect ADM -- the fact that it continues to diversify and find innovative ways to sell its products and services, plus have a steady cash flow, in my opinion, will not only help ADM survive this downturn but it will continue to solidify its market position.

Summary
ADM recently beat the consesus on their fiscal first quarter, coming in at 133% over market estimates. While that's noteworthy, the better story is their historical performance and their dividends. In 2004, they were paying roughly 7 cents a share. In 2008, they were paying 13 cents a share.

They are a solid buy for mid-term to long-term position.

-Don

Question: Should I buy (NASDAQ: APPL) Apple now?

2009-01-01T01:36:00.000-08:00

Question: Should I buy (NASDAQ: APPL) Apple now?

I asked myself this question over the holidays. My answer after a few brief seconds was a 'no' and to wait and see... The whole world is waiting for some type of announcement regarding Steve Jobs.

1. Short term looks bad for the stock but good for discount buying - Steve Jobs' no show and rumors of him being sick will bring the stock price down. This is a good buying opportunity. Jobs may resign his CEO post and create a "creative thinker" position to reduce the fear factor among the shareholders, similar to what Bill Gates did. I hope and pray he will be well and won't suffer through a cancer recurrence. If he is going through some sort of serious illness now, he needs to take a breather and not get stressed out.

2. Mid term looks slow... Despite the WalMart iPhone announcement, expect weaker overall sales. Corporations aren't buying and consumers are in save mode. Drop by at my hometown's Apple stores and you will see less folks walking in, while last year I saw it packed during the holidays and I felt a bit cramped.

3. Long term looks okay if they launch a netbook. I'm expecting an Apple netbook at some point priced around $600 (or $599). Netbooks from Dell, Asus, and others were selling like hot cakes during the holidays -- expect more of this to come...cheap, compact, and workable notebooks that can do your homework, basic games, and Internet needs -- that's what people looking-for-a-laptop-for-the-first-time buy in a recession. Or people that travel a lot and have big 15 inch laptops but want a smaller one. (Yeah, I'm one. I expect to buy a netbook this year that can run Microsoft Office.)

-Don

Happy New Year!

2009-01-01T00:41:00.001-08:00

Happy New Year!

Year 2009 is here and hopefully this year we are one step closer to bringing this crazy recession to an end. By encouraging trading and smart "picking", we hope to somewhat help with the recovery.

On January 1, 2009, MysteryStockPicks.com was put online to deliver:

Good, free, stock picks. We are so sick and tired of newsletters with user registration requirements (and hidden fees) that we thought....hmm...we could probably do it better!
Research and data driven. We will share our stock picks that are based on data and trends!
Legal and no insider trading. We will not entertain insider trading information.
Mostly mid-term to long-term. We aren't day traders, sorry. If we do see some stocks providing some short term lifts and then profit taking, of course, we will post it. But for the most part, expect our stock picks to be mid-term to long-term buys.

If you got questions about the site, let us know by e-mailing us at mysterystockpicks [at] gmail.com.

Thanks!

Don Sausa
Author of Investing Without Losing Series

Disclosure - Legal Stuff and Copyright

2009-01-01T00:01:00.000-08:00

Past performance is not a guarantee of future results.

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