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NEXT PUBLICATION DATE: MAY 2, 2003
Volume 1 Issue 4
TM
SSR Web Site: www.stocksuperstars.com • SSR Telephone Hotline: 877-281-7680
Dec 2001 Feb 2002 Apr 2002 Jun 2002 Aug 2002 Oct 2002 Dec 2002 Feb 2003
$70,000
$80,000
$90,000
$100,000
$110,000
$120,000
Growth of $100,000
PERFORMANCE OF SSR VS. WILSHIRE 5000
IIIIINNNNN T T T T THISHISHISHISHIS I I I I ISSUESSUESSUESSUESSUE
Performance of SSR vs. Wilshire 5000 ......... 1
Portfolio Actions This Month ....................... 2
Total Return Table: SSR vs. Indexes ............ 2
Benchmark Charts .......................................... 3
SSR Stocks in the News .................................. 3
Recent Earnings Announcements ............... 4
The Current SSR Portfolio ............................. 6
In-Depth Stock Reports
Biosite Incorporated .................... 8
Friedman’s Inc. .............................. 9
Cooper Companies .................... 10
Fresh Del Monte Produce .......... 11
AP
RIL 2
00
3
New Pick
New Pick
New Pick
Buffeted by uncertainty over the path
of the economy and distracted by the
confrontation in Iraq, stocks ended the
quarter down. The housing industry
and mortgage rates remained bright
spots, but employment, corporate
profit and manufacturing numbers still
seemed dim, and the prospects for
elimination of the taxation on divi-
dends declined. In all, the storm front
of uncertainty hovering over the
market hardly diminished and any
corporate or industry news that wasn’t
extraordinarily good, walloped
individual stocks and the market.
While the market may be under a
cloud, plenty of stocks have been solid
and getting stronger even in a weak
market. There are four SSR buy
recommendations for April: Biosite
Incorporated (BSTE) for Group 1,
Friedman’s Inc. (FRDM) for Group 2,
Cooper Companies (COO) for Group
3, and Fresh Del
Monte Produce (FDP)
for Group 4.
Biosite engages in
medical research that
it converts into testing
products to aid
doctors in diagnosing
disease. These
diagnostic tests are
designed to simplify
laboratory medicine
and detect such
conditions as cardiac
problems, drug abuse, and parasites.
As a Group 1 recommendation,
Biosite has demonstrated the ability to
grow earnings while exhibiting strong
relative price strength. Fully diluted
earnings per share from continuing
operations have grown at over 50% a
year annually over the last five years
with trailing 12-month earnings at
$0.86 per share. The Group 1 screen
also seeks smaller firms and while the
market capitalization of Biosite is $575
million, it is listed on the Nasdaq
National Market.
Friedman’s Inc. fits the Group 2
profile: reasonable price multiples,
positive earnings growth, a history ofNew Pick
AprilSSR.p65 4/4/2003, 9:53 AM1
2 APRIL 2003
Stock Superstars Report
MarchYear-to-Date '03
Since SSR Inception RiskGrade
Stock Superstars* 1.1% -3.5% -3.0% 76 Wilshire 5000 1.0% -3.5% -23.7% 116 S&P 500 0.8% -3.6% -24.9% 121 S&P MidCap 400 0.7% -4.6% -18.5% 104 S&P SmallCap 600 0.7% -5.9% -19.7% 102 Nasdaq 100 0.9% 3.5% -34.6% 153 [Performance as of 3/31/2003]*The Stock Superstars portfolio is an actual portfolio started at the beginning of 2002.
The SSR portfolio is run as if managed by a subscriber and includes delays in
reaction time to SSR alerts, actual commissions and bid-ask spreads.
TOTAL RETURN PERFORMANCE: SSR VS. INDEXES
April Buy Recommendations:
Group Company (Exch: Ticker)
Latest
Price
(3/31/03)
Risk-
Grade Description
1 Biosite Incorporated (M: BSTE) $38.41 197 rapid medical diagnostic prods
2 Friedman's Inc. (M: FRDM) $9.60 244 operates 600+ jewelry stores in 22 states
3 Cooper Companies (M: COO) $29.90 182 health care prods including contacts
4 Fresh Del Monte Produce (N: FDP) $15.25 217 produces and distributes fresh produce
Sells Since Last Monthly Issue:
Group Company (Exch: Ticker)
Sell Alert
Date
Price on
Sell Date
G/L Since
Rec
Wilshire 5000
Change Since
Rec
Date Recom-
mended
2 Minerals Technologies (N: MTX) 3/14/2003 $35.45 -8.3% -7.9% 8/9/20023 Mentor Corporation (M: MNTR) 3/14/2003 $16.02 -18.2% -7.1% 11/1/20024 First Essex (M: FESX) 3/21/2003 $31.43 15.3% -16.1% 2/8/2002
4 R.J. Reynolds Tobacco (N: RJR) 4/4/2003 $32.26* -22.8% -6.3% 1/3/2003
*Data as of 3/31/2003.
PORTFOLIO ACTIONS THIS MONTH
dividend payments and reasonable debt.
Friedman’s operates 650 jewelry stores
in 22 states, primarily in the South and
Midwest, aimed at the middle-income
market. With a price-earnings ratio of 6.8,
a 0.9% dividend yield and a consensus
expected long-term earnings growth rate
of 15%, Friedman’s more than meets a
reasonably priced multiples and earn-
ings growth screen.
Cooper Companies—along with its
subsidiaries—develops, manufactures
and markets a range of healthcare
products that include contact lenses,
diagnostics and medical devices and
instruments. The Group 3 screen—
strong sales and earnings growth with a
relatively low price-earnings ratio—
identified Cooper Companies. Histori-
cally, Cooper Companies has grown
earnings per share (on a fully diluted
basis from continuing operations)
annually at 26.8% over three years.
Currently, their earnings per share on this
basis over the trailing 12 months is $1.71
and the price-earnings ratio is 17.5.
Sales grew over the last three years at
23.3% annually.
The name of the Group 4 selection
tells much about its business: Fresh Del
Monte Produce. FDP produces, distrib-
utes and markets fresh fruits and
vegetables worldwide in over 50 coun-
tries. Beyond the combination of a low
price-earnings ratio and strong earnings
and sales growth, the Group 4 screen
identifies firms with strong profitability
relative to industry benchmarks. Fresh
Del Monte Produce grew earnings per
share (on a fully diluted basis from
continuing operations) annually at a
30.5% rate over the last five years while
sales were growing at a 7.6% annual
rate. Both gross and operating margins
also climbed during the period. Cur-
rently, the price-earnings ratio is 4.3 and
earnings per share (on
a fully diluted basis
from continuing
operations) is $3.58 for
the trailing 12 months.
FDP currently pays a
$0.20 annual dividend
for a 2.6% dividend
yield.
Since the last
newsletter issue, SSR
recommended four
sales: Minerals
Technologies (MTX)
on 3/14/03, Mentor
Corp. (MNTR) on 3/14/
03, First Essex Bancorp
(FESX) on 3/21/03, and R.J. Reynolds
Tobacco (RJR) on 4/4/03.
Minerals Technologies declined after
warning that fourth quarter earnings
would be below expectations due
primarily to a drop in European steel
business and the bankruptcy of a key
customer.
Mentor Corp., maker of plastic surgery
products, forecast that fiscal 2003
earnings would grow 30% to 35% and
sales would grow 17% to 20%, but also
forecast that fiscal 2004 sales would
slow to 10% to 11%. Additionally, some
(continued on page 12)
AprilSSR.p65 4/4/2003, 9:53 AM2
APRIL 2003 3
Stock Superstars Report
SSR SSSR SSSR SSSR SSSR STOCKSTOCKSTOCKSTOCKSTOCKS INININININ THETHETHETHETHE N N N N NEWSEWSEWSEWSEWSSSR Portfolio - Growth of $1.00
$0.80
$0.90
$1.00
$1.10
$1.20
$1.30
Jan 2002 Jan 2003
700
800
900
1000
1100
1200
1300
Jan 2002 Jan 2003
S&P LargeCap 500
S&P SmallCap 400
150
170
190
210
230
250
270
Jan 2002 Jan 2003
Nasdaq 100 (QQQ)
15
20
25
30
35
40
45
Jan 2002 Jan 2003(continued on next page)
Share News
Group 1
3/4/2003—Shares of homebuilders, including NVR, Inc.
(NVR) and Group 4 Centex Corp. (CTX), were weak after
Federal Reserve Board Chairman Alan Greenspan said the
pace of housing price increases and home loan borrowing is
likely to slow this year. Greenspan was quoted as saying the
“frenetic pace of home equity extraction last year” will likely
slow and provide less support to the consumer sector.
3/10/2003—Standard and Poor’s announced that S&P
SmallCap 600 component Corinthian Colleges, Inc. (COCO)
will replace Cirrus Logic (CRUS) in the S&P MidCap 400 Index
after the close of trading on Wednesday, March 12, 2003.
Group 2
3/11/2003—Thor Industries, Inc. (THO) announced that its
board of directors has approved the purchase of up to one
million shares of its common stock from time to time at the
discretion of management.
Group 3
3/18/2003—W Holding Company, Inc. (WHI) filed with the
Securities and Exchange Commission (SEC) to periodically
sell up to $300 million in stock. The net proceeds of the sale
will be used to help Westernbank, of which WHI is the holding
company, increase its deposits, borrowings, loans and
investments, according to the shelf registration filing.
Earnings Reports
Group 1
3/25/2003—LNR Property Corp. (LNR) reported record net
earnings for its first quarter ended February 28, 2003, of $34.8
million, or $1.06 per share diluted, compared to net earnings of
$28.3 million, or $0.81 per share diluted for the same quarter in
2002.
Group 3
3/18/2003—American Healthways, Inc. (AMHC) reported that
its second-quarter net income rose 110% due to expansion of
its care enhancement business and health-plan incentive
bonuses. For the quarter ended February 28, 2003, the
company reported net income of $5.1 million, or $0.31 a share,
compared with $2.4 million, or $0.15 a share for the second
quarter of 2002. Revenue rose to $40.1 million from $28.4
million. The results beat the average Wall Street estimate of
$0.25 a share, as compiled by research firm I/B/E/S. Citing the
AprilSSR.p65 4/4/2003, 9:53 AM3
4 APRIL 2003
Stock Superstars Report
Date Reported Expected SurpriseStock (Exchange: Ticker) Reported Earnings Earnings %
Group 1
LNR Property Corp. (N: LNR) Mar 25 $1.06 $1.05 1.0%Group 3
American Healthways, Inc. (M: AMHC) Mar 18 $0.31 $0.25 24.0%
RECENT EARNINGS ANNOUNCEMENTS
SSR STOCKS IN THE NEWS
stronger-than-expected second-quarter performance, AMHC
raised its fiscal 2003 earnings per share guidance to between
$1.04 and $1.08 from its previous range of $1.02 to $1.06. Its
2003 revenue forecast was unchanged at $180 million to $195
million. For the third quarter, the company said it now expects
earnings per share in the range of $0.26 to $0.28 a share.
Group 4
3/5/2003—Centex Corp. (CTX) reported that sales of homes
in the first two months of the year were 18% higher than for
January and February last year, prompting it to reaffirm its profit
estimate for 2003. The company expects fiscal 2003 earnings
to be in the range of $8.45 to $8.60 per share. The sales
backlog at the end of February was about 34% higher than the
same time a year ago and the company expects to close about
26,000 homes for fiscal 2003 ending March 31, 2003, a 13%
gain over fiscal 2002.
Upgrades/Downgrades
Group 1
3/27/2003—J.P. Morgan cut its rating on Corinthian Col-
leges, Inc. (COCO) to “neutral” from “overweight,” citing rising
purchase price multiples among higher education firms, an
increase in allied health offerings among post-secondary
education companies, and valuation.
4/1/2003—Fitch Ratings upgraded NVR, Inc.’s (NVR) senior
unsecured debt and unsecured bank credit facility ratings to
BBB from BBB–; the Rating Outlook is Stable. The rating action
reflects the strong credit protection measures, solid free cash
flow generation and balance sheet liquidity that results from its
unique operating model, and the company’s capacity to
withstand a meaningful housing downturn.
Group 3
3/6/2003—Morgan Stanley initiated coverage of Moody’s
Corporation (MCO) at “equal-weight.”
Group 4
3/18/2003—A J.P. Morgan analyst reiterated their “negative”
stance on the homebuilding sector, including Centex Corp.
(CTX), following the weaker-than-expected housing starts data
for February.
4/1/2003—Credit Suisse First Boston initiated coverage of
R.J. Reynolds Tobacco (RJR) as “underperform” with a price
target of $32.
Legal News
Group 4
3/3/2003—R.J. Reynolds Tobacco (RJR) reported that the
company and its RJR Tobacco unit were served with subpoe-
nas in January by a federal grand jury seeking documents
relating to the international sale and distribution of cigarettes.
R.J. Reynolds said the company and its unit “intend to respond
appropriately to the subpoena and otherwise cooperate with
this grand jury investigation.”
3/6/2003—Centex Corp. (CTX) announced that the company
has been awarded $28.1 million by the U.S. Court of Federal
Claims. The award follows the court’s July 18, 2001, ruling that
held that the United States breached a contract with Centex
related to the company’s 1988 acquisition of four savings and
loan (S&L) associations, which became known as Texas Trust
Savings Bank, FSB.
3/18/2003—Tobacco shares, including those of R.J.
Reynolds Tobacco (RJR), fell amid renewed talk of the U.S.
Justice Department’s case against the industry. However, a
Morgan Stanley tobacco analyst was quoted as saying “I
remain of the view ... that this case is fatally flawed.” The
government said in its January filing that the country is entitled
to $289 billion under the U.S. Racketeer Influenced and
Corrupt Organizations Act. Judge Gladys Kessler earlier
rejected two of the government’s three claims. Only the
racketeering charges remain in the case.
3/24/2003—Tobacco-related shares, including R.J.
Reynolds Tobacco (RJR), fell after a $10.1 billion ruling
against Altria’s Philip Morris USA unit in a “light” cigarettes
case. However, industry watchers said the company has strong
grounds for appeal.
Company Announcements
Group 1
3/4/2003—Engineered Support
Systems (EASI) named Gerald
Daniels, a former executive at Boeing
Co. (BA), to succeed company co-
founder Michael Shanahan as chief
executive on April 1, 2003. In a
separate announcement, EASI has
entered into a letter of intent to
AprilSSR.p65 4/4/2003, 9:53 AM4
APRIL 2003 5
Stock Superstars ReportSSR STOCKS IN THE NEWS
purchase all the outstanding equity of Technical and Manage-
ment Services Corporation (TAMSCO), a Calverton, Maryland-
based provider of information technology logistics and digitiza-
tion services and a designer and integrator of telecommunica-
tions systems primarily for the U.S. Department of Defense.
According to the terms of the agreement, EASI will pay cash of
$66.5 million to acquire all the outstanding equity of TAMSCO.
3/11/2003—Engineered Support Systems (EASI) received
two separate orders totaling $36.4 million for the production of
Tactical Quiet Generator (TQG) sets. The Army exercised an
option valued at $18.2 million under an existing contract to
purchase a total of 1,382 of the five-, 10- and 15-kilowatt TQG
sets. The company received an additional order totaling $18.2
million from the Army for the production of 2,276 three-kilowatt
TQG sets.
3/11/2003—Corinthian Colleges, Inc. (COCO) was ranked
#2 for one-year average annual return and #4 for three-year
average annual return in The Wall Street Journal’s “Top Guns”
lists of the five top-performing companies for each period.
Corinthian’s average annual returns were reported as 85.2%
for the one-year period and 85.1% for the three-year period.
3/19/2003—Corinthian Colleges, Inc. (COCO) announced
that on-line course registrations for its 2003 third fiscal quarter
ending March 31, 2003, increased 82% from the third quarter
of last year to a record 7,349.
3/26/2003—Engineered Support Systems (EASI) received a
production option worth $19.0 million to provide 52 of its
Chemical Biological Protected Shelter systems under an
existing contract with the U.S. Army Soldier & Biological
Command.
3/31/2003—Engineered Support Systems (EASI) announced
the relocation of its electronics assembly work at the Sanford,
Florida, facility of its Systems & Electronics Inc. (SEI) subsidiary
to alternate facilities as part of the company’s facility rational-
ization plan aimed at improving operating efficiency and long-
term profitability. As a result, the company will incur a pretax
restructuring charge of approximately $3 million ($1.8 million
aftertax), approximately $1.5 million of which ($900,000
aftertax) the company expects to record during the current
quarter ending April 30, 2003. The remainder of the $3 million
pretax charge will be recorded primarily over the second half of
the year. Recurring aftertax cost savings of an estimated $1.5
million to $2 million are expected to be realized annually
commencing in fiscal 2004.
3/31/2003—Corinthian Colleges, Inc. (COCO) announced
the opening of the new Georgia Medical Institute (GMI) facility
in Norcross, Georgia, marking its fifth campus in the greater
Atlanta metropolitan area offering diploma programs in the
allied healthcare field. COCO expects the campus will grow to
include more than 400 students within two years.
4/1/2003—Oshkosh Truck Corporation (OSK) won a
contract worth $250 million to supply tankers to the British
Armed Forces. The contract for 348 wheeled tankers includes
a mix of tactical aircraft refuellers and close support tankers.
The equipment portion of the contract is valued at about $230
million, with 20% of sales expected in fiscal 2005, 50% in 2006
and 30% in 2007.
Group 2
3/14/2003—Wolverine World Wide (WWW) announced that
its Bates division has been awarded a Department of Defense
contract to supply the U.S. Army with an upgraded Infantry
Combat Boot. This contract may extend, at the government’s
option, for a period of up to five years, with revenues estimated
to range from $8.9 million to $22.0 million per year. Deliveries
under the new contract are scheduled to begin late in the third
quarter of 2003 and, therefore, will not have a material effect on
the company’s 2003 results.
Group 3
3/4/2003—SICOR Inc. (SCRI) announced that its wholly-
owned subsidiary, Gensia Sicor Pharmaceuticals, Inc.,
received approval of an Abbreviated New Drug Application from
the Food and Drug Administration for Norepinephrine Bitartrate
Injection, which is used to restore blood pressure and control
acute hypotensive states and as an adjunct in the treatment of
cardiac arrest and profound hypotension. According to IMS, a
market research firm, U.S. sales of norepinephrine were
approximately $21 million in 2002.
3/12/2003—Shares of Mentor Corp. (MNTR) face continued
downward pressure amid concerns that regulatory approval of
silicone breast implants may meet resistance. A letter to the
U.S. Food and Drug Administration (FDA) dated March 7
signed by five members of Congress, including Senators
Edward Kennedy, Barbara Boxer and Hillary Rodham Clinton,
questioned the FDA’s approval of saline implants and raised
concerns ahead of a review of silicone implants.
3/13/2003—SICOR Inc. (SCRI) announced that the Food
and Drug Administration (FDA) issued a tentative approval of an
Abbreviated New Drug Application submitted by its wholly
owned subsidiary, Gensia Sicor Pharmaceuticals, Inc., for
fludarabine phosphate for injection. Fludarabine is indicated
for the treatment of patients with B-cell chronic lymphocytic
leukemia. Based on data from IMS Health, a market research
firm, U.S. sales of fludarabine phosphate for injection in 2002
were approximately $67 million. Final approval is subject to the
resolution of Berlex’s application for pediatric exclusivity, which
(continued on page 12)
AprilSSR.p65 4/4/2003, 9:53 AM5
APRIL 2003 7
Stock Superstars Report
6 APRIL 2003
Stock Superstars Report
EPS (TTM) – The amount of fully diluted earnings from continuing
operations reported by a company for the most recent 12-month period
(TTM) on a per share basis.
EPS (Est Current Year) – The average consensus earnings estimate for
the current fiscal year.
Growth Rate—Hist EPS – The compound annual percentage change in
fully diluted earnings per share from continuing operations over the last
five fiscal years.
Growth Rate—Est EPS – The average of analysts’ expected long-term
(three- to five-year) growth rate in earnings per share.
Growth Rate—Hist Sales – The compound annual percentage change
in total sales over the last five fiscal years.
Price-to-Sales Ratio – The current stock price divided by the sales per
share for the trailing 12 months (last four fiscal quarters).
Price-to-Book-Value Ratio – The current stock price divided by book
value per share for the latest reported fiscal quarter. Book value per share
is equal to total assets less total liabilities and preferred stock, divided by
common shares outstanding.
Div Yield – The indicated dividend (last quarterly per share dividend
multiplied by four) divided by the current stock price.
Market Cap (Mil) – The current stock price multiplied by the average
number of common shares outstanding during the last fiscal quarter.
Avg Daily Dollar Volume (Mil) – The current stock price multiplied by the
average daily trading volume over the last six months.
Rel Strength Since Rec (Index) – Price performance of a stock compared
to the Wilshire 5000 index since the stock was recommended for the SSR
portfolio.
Rel Strength % Rank – An indication of how a stock has performed
relative to all U.S.-listed stocks over the stated time period. A rank of 75%
reflects performance that surpassed 75% of all stocks over the period—or
that places the stock within the top 25% of the universe.
RiskGrade – A measure of price volatility that can range from 0 to 1,000
or more, where 100 corresponds to the market-cap-weighted average
volatility of global equities during normal market conditions over the
period 1995 to 1999. A RiskGrade of 0 indicates that a financial asset
effectively has no price volatility—such as cash. A RiskGrade of 1,000
indicates that a financial asset is 10 times as volatile as an asset or index
with a RiskGrade of 100. The RiskGrade of an asset increases in direct
proportion to its price volatility.
P/E Ratio (TTM) – The current stock price divided by diluted earnings per
share from continuing operations for the trailing 12 months.
P/E Relative—Current – The current price-earnings ratio of the stock
divided by the median (midpoint) price-earnings ratio for the complete
universe of stocks.
P/E Relative—5 Yr Avg – The annual average P/E relative over the last
five calendar years. A figure above 1.00 would indicate that the
company’s price-earnings ratio was normally above the median price-
earnings ratio for the universe of stocks.
RelStrength EPS
Date Recom- Latest Since Since P/E Avg (EstRecom- mended Price One Recom- Rec Risk- Ratio Current 5 Yr EPS Current
Company (Exchange: Ticker) mended Price (3/31/03) Month mended (Index) 4 Wk 52 Wk Grade (TTM) (TTM) Year)Group 1: Profitability & Relative StrengthBiosite Incorporated (M: BSTE) 4/4/03 na $38.41 na na na 93% 95% 197 44.7 2.98 nmf $0.86 $1.42IDEXX Laboratories (M: IDXX) 2/28/03 $36.46 $34.97 -2.8% -4.1% 0.95 39% 91% 132 26.9 1.79 nmf $1.30 $1.53Courier Corporation (M: CRRC) 1/31/03 $45.07 $49.26 7.1% 9.3% 1.10 80% 89% 109 15.2 1.01 0.63 $3.24 $3.49Engineered Support Systems (M: EASI) 11/27/02 $36.53 $39.15 9.4% 7.2% 1.18 81% 90% 208 21.3 1.42 0.85 $1.84 $2.04LNR Property Corp. (N: LNR) 11/27/02 $35.97 $33.70 2.4% -6.3% 1.03 62% 72% 92 7.9 0.53 0.48 $4.26 $3.75Corinthian Colleges, Inc. (M: COCO) 9/6/02 $36.50 $39.51 8.9% 8.2% 1.14 72% 95% 209 33.8 2.25 nmf $1.17 $1.34MAF Bancorp, Inc. (M: MAFB) 4/8/02 $34.55 $33.65 -1.4% -2.6% 1.28 43% 70% 85 10.8 0.72 0.70 $3.11 $3.31Port Financial Corp. (M: PORT) 3/8/02 $32.19 $47.77 -2.4% 48.4% 2.01 36% 94% 108 17.5 1.17 nmf $2.73 $3.20Oshkosh Truck Corporation (N: OSK) 2/8/02 $53.25 $62.30 0.3% 17.0% 1.47 53% 81% 169 17.4 1.16 0.81 $3.58 $3.89NVR, Inc. (A: NVR) 2/8/02 $244.00 $329.00 -1.8% 34.8% 1.69 58% 80% 164 9.1 0.61 0.38 $36.12 $42.20Group 2: Reliable Earnings & DividendsFriedman's Inc. (M: FRDM) 4/4/03 na $9.60 na na na 36% 63% 244 6.8 0.45 0.53 $1.42 $1.47Superior Industries Int'l (N: SUP) 2/28/03 $38.74 $36.43 -8.1% -6.0% 0.93 27% 53% 182 12.5 0.83 0.82 $2.91 $3.31Thor Industries, Inc. (N: THO) 1/31/03 $27.50 $25.03 -4.5% -9.0% 0.92 36% 79% 269 9.8 0.65 0.77 $2.55 $2.53Banta Corporation (N: BN) 11/27/02 $30.80 $29.48 4.2% -4.3% 1.05 62% 58% 127 17.2 1.15 1.17 $1.71 $2.48Owens & Minor, Inc. (N: OMI) 11/27/02 $16.39 $17.55 5.7% 7.1% 1.18 77% 65% 130 13.8 0.92 1.06 $1.27 $1.39Wolverine World Wide (N: WWW) 3/8/02 $17.05 $16.75 3.9% -1.8% 1.33 62% 71% 161 14.6 0.97 1.38 $1.15 $1.22Helmerich & Payne, Inc. (N: HP) 2/8/02 $19.33 $25.62 -6.5% 32.5% 1.66 33% 45% 182 36.1 2.41 1.69 $0.71 $0.28Applied Industrial Tech. (N: AIT) 1/3/02 $18.50 $16.71 3.0% -9.7% 1.21 65% 64% 200 22.0 1.47 nmf $0.76 $0.82Group 3: Earnings MomentumCooper Companies (M: COO) 4/4/03 na $29.90 na na na 65% 90% 182 17.5 1.17 0.89 $1.71 $2.05Headwaters Incorporated (M: HDWR) 1/31/03 $14.30 $14.05 -2.9% -1.7% 0.99 58% 68% 157 13.5 0.90 nmf $1.04 $1.31American Healthways, Inc. (M: AMHC) 1/3/03 $17.69 $19.00 17.9% 7.4% 1.15 92% 49% 197 20.0 1.33 nmf $0.95 $1.08SICOR Inc. (M: SCRI) 11/27/02 $15.95 $16.70 17.4% 4.7% 1.15 88% 75% 158 15.8 1.05 nmf $1.06 $0.96W Holding Company, Inc. (N: WHI) 9/6/02 $18.51 $18.36 3.4% -0.8% 1.04 43% 95% 126 16.5 1.10 1.13 $1.11 $1.41Taro Pharmaceutical Ind. (M: TARO) 8/9/02 $31.06 $38.28 8.5% 23.2% 1.31 72% 92% 189 25.2 1.68 1.37 $1.52 $1.97Doral Financial Corp. (N: DRL) 6/10/02 $26.07 $35.35 12.8% 35.6% 1.64 81% 95% 137 12.4 0.83 0.87 $2.84 $3.58Moody's Corporation (N: MCO) 4/8/02 $40.41 $46.23 8.3% 14.4% 1.50 72% 83% 139 25.3 1.68 nmf $1.83 $2.01Affiliated Computer Svcs. (N: ACS) 3/8/02 $52.50 $44.26 -1.1% -15.7% 1.14 58% 58% 200 22.4 1.49 1.62 $1.98 $2.18Renal Care Group, Inc. (N: RCI) 2/8/02 $30.47 $31.18 5.3% 2.3% 1.28 77% 70% 94 17.1 1.14 1.32 $1.82 $2.09R&G Financial Corp. (M: RGF) 2/8/02 $18.56 $22.00 0.1% 18.5% 1.49 39% 81% 125 8.9 0.59 0.76 $2.47 $2.81Group 4: Reasonably Priced GrowthFresh Del Monte Produce (N: FDP) 4/4/03 na $15.25 na na na 13% 59% 217 4.3 0.28 0.53 $3.58 $3.72Centex Corp. (N: CTX) 2/28/03 $55.28 $54.36 -3.6% -1.7% 0.97 43% 79% 172 7.2 0.48 0.59 $7.56 $8.53Helen of Troy Limited (M: HELE) 11/27/02 $9.62 $13.10 0.7% 36.2% 1.50 43% 67% 169 10.6 0.70 0.94 $1.24 $1.29Craftmade International (M: CRFT) 11/27/02 $14.45 $14.25 0.7% -1.4% 1.09 58% 64% 147 na na 0.91 $1.30 $1.24ePlus, Inc. (M: PLUS) 8/9/02 $5.72 $7.20 -2.3% 25.9% 1.34 43% 54% 114 7.7 0.52 1.14 $0.93 $0.96Stewart Information Svcs. (N: STC) 4/8/02 $19.53 $23.21 1.3% 18.8% 1.56 43% 84% 139 4.4 0.29 6.10 $5.30 $3.50Unisource Energy Corp. (N: UNS) 2/8/02 $17.00 $17.30 3.9% 1.8% 1.28 62% 61% 102 17.8 1.19 0.80 $0.97 na
Data as of 3/31/2003. Source: AAII Stock Investor Pro, Market Guide and I/B/E/S. Exchange Key: N = New York, M = Nasdaq, A = American.
(1=All Stocks)
Gain/LossRel Strength
% Rank
P/E RelativePrice- Avg
EPS Price- to- Daily(Est to- Book- Market Dollar
Current Hist Est Hist Sales Value Div Cap VolumeYear) EPS EPS Sales Ratio Ratio Yield ($ Mil) ($ Mil) Description
$1.42 57.1% 30.0% 27.1% 5.78 5.6 0.0% $575 $20.2 rapid medical diagnostic prods$1.53 34.0% 21.7% 9.3% 2.84 3.4 0.0% $1,217 $9.2 detection & diagnostic prods for veterinary mkts$3.49 26.5% 11.5% 9.0% 1.25 2.6 0.9% $260 $0.5 printer specializing in book production & distrib$2.04 27.9% 15.6% 35.7% 1.42 4.1 0.1% $636 $9.7 military support equip & electronics$3.75 27.7% 19.1% 23.0% 2.26 1.0 0.1% $1,079 $4.1 commercial & multi-family real estate prop$1.34 60.6% 23.9% 34.4% 4.03 9.0 0.0% $1,729 $35.1 operates 63 for-profit colleges$3.31 14.4% 10.2% 6.6% 2.37 1.6 2.1% $786 $2.1 holding co for consumer bank (Mid America Bank)$3.20 40.9% 11.0% 13.1% 2.68 1.8 1.7% $250 $1.1 holding co for savings bank (Cambridgeport Bank)$3.89 34.6% 15.9% 20.6% 0.58 2.4 0.6% $1,052 $6.3 emergency apparatus & specialty trucks
$42.20 75.3% 15.0% 21.4% 0.74 5.8 0.0% $2,412 $31.1 holding co for home builder & mortgage bank
$1.47 0.8% 15.0% 15.3% 0.39 0.6 0.9% $175 $0.5 operates over 600 jewelry stores in 22 states$3.31 8.2% 14.1% 7.3% 1.26 1.9 1.4% $973 $5.9 mfrs aluminum & steel wheels for auto ind$2.53 23.2% 19.5% 14.8% 0.47 1.9 0.2% $717 $3.6 mfrs mobile homes & buses$2.48 3.5% 9.5% 2.6% 0.55 1.6 2.2% $738 $2.9 printing & digital imaging servs$1.39 16.0% 13.0% 4.9% 0.15 2.2 1.8% $591 $2.4 distribs medical/surgical supplies$1.22 3.7% 11.0% 4.5% 0.82 1.9 1.3% $698 $2.2 outdoor, work and casual footwear$0.28 -8.5% nmf -0.3% 2.67 1.4 1.2% $1,322 $9.1 crude oil and natural gas$0.82 -12.0% 12.7% 4.5% 0.22 1.1 2.9% $323 $0.9 distribs industrial products
$2.05 -1.1% 20.8% 28.8% 2.63 2.8 0.4% $935 $17.7 health care prods including contacts & diag equip$1.31 22.1% 20.0% 312.4% 1.99 3.5 0.0% $391 $3.8 recycles coal & steel waste into fuel & revert mat'ls$1.08 66.2% 25.3% 32.1% 1.99 3.0 0.0% $297 $4.0 special care servs to health plans & hospitals$0.96 24.0% 18.1% 25.0% 4.29 2.9 0.0% $2,030 $9.0 oncology & injectable specialty pharmaceuticals$1.41 25.2% 28.5% 29.7% 3.07 2.3 1.5% $1,247 $2.8 holding co for Puerto Rican bank$1.97 85.1% 24.8% 28.2% 5.19 4.1 0.0% $1,123 $14.3 OTC & prescription pharmaceuticals$3.58 32.0% 22.5% 27.0% 6.11 3.3 1.6% $2,551 $12.3 holding co for Puerto Rican bank$2.01 20.2% 15.6% 17.5% 6.82 nmf 0.4% $6,883 $35.2 global credit rating, research & risk analysis $2.18 27.6% 20.5% 27.0% 1.68 2.6 0.0% $6,022 $70.6 information technology services$2.09 27.5% 14.0% 26.9% 1.72 2.9 0.0% $1,514 $6.3 nephrology services for kidney patients$2.81 25.3% 14.0% 29.7% 2.27 1.7 1.8% $747 $1.3 holding co for Puerto Rican bank & mortgage co
$3.72 30.5% 8.3% 7.6% 0.41 1.1 2.6% $866 $6.3 produces, distributes and markets fresh produce$8.53 27.7% 14.9% 15.4% 0.39 1.3 0.3% $3,391 $59.7 home builder operating in 25 states$1.29 10.0% 13.7% 16.2% 0.80 1.3 0.0% $366 $2.2 hair accessories & dryers, body massagers$1.24 27.1% 18.3% 13.2% na 4.2 2.0% $78 $0.3 ceiling fans and related prods$0.96 5.2% 12.5% 18.9% 0.26 0.7 0.0% $70 $0.1 automated Internet supply chain mgmt prod$3.50 36.7% 5.0% 20.2% 0.26 0.8 0.0% $407 $1.3 title insurance on homes & other real estate
na -17.8% na 3.2% 0.68 1.3 3.5% $578 $1.4 holding co for Tucson Electric & Millennium Energy
American.
Growth Rate
8 APRIL 2003
Stock Superstars Report
SSR Group 1: Biosite Incorporated (BSTE) $38.41 ($39.95 - $17.35)
Group 1: Profitability & Relative StrengthDate Recommended: 4/4/2003Recommended Price: Closing Price on 4/4/2003Primary Industry: Biotechnology & DrugsRiskGrade: 197Market Cap: $575.2 MilAvg Daily Dollar Volume: $20.2 MilBiosite Incorporated (BSTE) is a research-based diagnosticscompany dedicated to the discovery and development of
protein-based tests that improve a physician's ability to
diagnose disease. The company combines separate, yet
integrated, discovery and diagnostics businesses to access
proteomics research, identify proteins with high diagnostic
utility, develop and commercialize products and educate the
medical community on new approaches to diagnosis. The
company's diagnostic products include its Triage Drugs of
Abuse Panel and Triage TOX Drug Screen, single-sample urine
tests that identify commonly abused drugs. Its Triage "C.
difficile" and Triage Parasite Panels detect intestinal parasites
and other pathogens. The company's Triage BNP Test aids indiagnosing congestive heart failure. Fisher Scientific, which Multiples Current 12/2002 12/2001 12/2000 12/1999 12/1998distributes many of Biosite's products in the US, accounts for Price/Earnings 44.7 28.7 80.6 119.2 1,555.5 nmf more than 80% of company sales. The Biosite Discovery Price/Book Value 5.6 3.5 5.6 9.2 2.8 2.5program is a collaborative research effort to identify new Price/Sales 5.8 3.6 7.7 12.1 3.7 3.7protein markers for diseases. Price/Cash Flow 35.3 28.7 49.9 70.8 35.5 38.1BSTE passed the Group 1 screen, which looks for smaller Price/Free Cash Flow nmf nmf 36.2 nmf nmf nmf companies with a proven record of earnings growth showing Yield (%) 0.0 0.0 0.0 0.0 0.0 0.0strong relative price strength. BSTE has a current P/E ratio of Ratios Current 12/2002 12/2001 12/2000 12/1999 12/199844.7 based on trailing 12-month EPS of $0.86. The consensus Gross Margin (%) 70.0 70.1 73.2 71.6 68.9 71.7earnings estimate for the 2003 fiscal year is $1.42 and $1.74 Operating Margin (%) 18.1 18.1 12.0 13.8 (2.1) (13.2)for the 2004 fiscal year. The most recent quarterly earnings Net Margin (%) 12.7 12.7 10.2 11.3 2.5 (3.0)came in at $0.31, which was in line with expectations, and was ROE (%) 13.4 13.5 8.2 9.6 2.0 (2.0)287.5% higher than the same quarter a year earlier. Earnings ROA (%) 11.3 11.5 7.2 8.2 1.6 (1.7)and revenues have increased steadily over the last five years. Current Ratio (%) 5.5 5.5 8.9 9.4 6.6 6.8Historically, earnings have grown at an annual rate of 57.1% Payout Ratio (%) 0.0 0.0 0.0 0.0 0.0 0.0over the last five years, and the consensus three-to-five year Liabilities to Assets (%) 17.7 17.7 11.5 12.2 16.6 16.9earnings growth rate estimate is 30%. BSTE's stock price has Asset Turnover (X) 0.9 0.9 0.7 0.7 0.7 0.6outpaced the S&P 500 index by 108% over the last 52 weeks Financial Statements TTM 12/2002 12/2001 12/2000 12/1999 12/1998and has outperformed 95% of all stocks. Sales ($M) 105.2 105.2 65.6 55.0 43.7 37.1
Stock Rel Strgth Rel Strgth Gross Income ($M) 73.6 73.7 48.0 39.4 30.1 26.6Gain Index Rank Depreciation ($M) -- -- -- -- -- --
S&P 500 index by 10 24% 1.21 93% Unusual/Extra ($M) 4.0 4.0 3.2 0.0 0.0 4.9outperformed 95% o 13% 1.14 77% Operating Income ($M) 19.0 19.0 7.9 7.6 (0.9) (4.9)26 Week 37% 1.31 84% Interest Expense ($M) 2.5 2.5 2.7 1.9 1.8 2.352 Week 57% 2.08 95% Pretax Income ($) 21.5 21.5 10.6 9.5 0.9 (2.6)
Net Income ($) 13.4 13.4 6.7 6.2 1.1 (1.1)Growth TTM 3 Year 5 Year Operating Cash Flow ($M) na na 21.7 4.6 4.4 0.7
Sales 60.1% 34.0% 27.1% Investing Cash Flow ($M) na na (16.4) (12.7) (1.8) (3.3)Net Income 100.0% 130.1% 62.0% Financing Cash Flow ($M) na na 6.0 5.3 1.3 1.0EPS Basic 87.2% 112.2% 50.9% Net Cash Flow ($M) na na 11.2 (2.8) 3.8 (1.6)EPS Dil Cont 95.5% 120.7% 57.1% EPS Basic ($) 0.88 0.86 0.47 0.45 0.09 (0.09)Dividends -- -- -- EPS Diluted Cont ($) 0.86 0.86 0.44 0.41 0.08 (0.09)
Dividends/Share ($) 0.00 0.00 0.00 0.00 0.00 0.00Est Surprise EPS % Surp SUE Score Free Cash Flow Share ($) na na 0.98 0.03 (0.06) (0.19)
1/27/2003 $0.31 0.00% -- Cash ($M) 70.9 70.9 55.5 36.2 32.3 34.3Quarterly Annual Annual Goodwill/Intangibles ($M) 7.9 7.9 9.2 8.6 7.6 7.2
EPS Estimates 3/2003 12/2003 12/2004 Total Assets ($M) 131.3 131.3 102.7 83.0 68.1 65.8
# of Estimates 5 5 4 Long-Term Debt ($M) 5.3 5.3 3.5 3.7 4.1 4.0Current $0.31 $1.42 $1.74 Total Liabilities ($M) 23.3 23.3 11.8 10.1 11.3 11.1Week Ago $0.31 $1.41 $1.74 Book Value/Share ($) 6.82 6.96 6.31 5.31 4.37 4.23Month Ago $0.31 $1.40 $1.74 Avg Shares Outst'g (M) 15.8 15.5 14.4 13.7 13.0 12.9
Source: AAII Stock Investor Pro, Market Guide and I/B/E/S. Data as of 3/31/2003.
Apr1998
Oct1998
Apr1999
Oct1999
Apr2000
Oct2000
Apr2001
Oct2001
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$10
$20
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$40
$50
$60
$70
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$90
AprilSSR.p65 4/4/2003, 9:53 AM8
APRIL 2003 9
Stock Superstars Report
SSR Group 2: Friedman's Inc. (FRDM) $9.60 ($13.84 - $6.36)
Group 2: Reliable Earnings & DividendsDate Recommended: 4/4/2003Recommended Price: Closing Price on 4/4/2003Primary Industry: Retail (Specialty Non-Apparel)RiskGrade: 244Market Cap: $175.4 MilAvg Daily Dollar Volume: $0.49 Mil
Multiples Current 9/2002 9/2001 9/2000 9/1999 9/1998
Price/Earnings 6.8 7.5 9.9 4.4 8.6 18.5Price/Book Value 0.6 0.6 0.5 0.4 0.7 1.0Price/Sales 0.4 0.4 0.2 0.2 0.4 0.7Price/Cash Flow 4.6 5.1 4.9 3.0 6.2 12.4Price/Free Cash Flow 157.0 nmf nmf nmf 9.1 nmf Yield (%) 0.9 0.8 0.8 1.0 0.5 0.0Ratios Current 9/2002 9/2001 9/2000 9/1999 9/1998
Gross Margin (%) 47.8 47.8 47.4 47.0 46.8 47.7Operating Margin (%) 9.7 8.2 4.8 9.0 8.9 6.9Net Margin (%) 5.8 5.3 3.0 5.2 5.4 4.1ROE (%) 9.2 9.2 5.7 9.8 8.9 6.1ROA (%) 5.5 5.2 3.2 6.6 6.1 4.3Current Ratio (%) 2.7 6.0 1.2 4.4 4.2 9.4Payout Ratio (%) 5.6 5.9 8.3 4.4 4.4 0.0Liabilities to Assets (%) 41.5 37.6 50.8 34.0 30.0 33.4Asset Turnover (X) 0.9 1.0 1.1 1.3 1.1 1.1Financial Statements TTM 9/2002 9/2001 9/2000 9/1999 9/1998
Sales ($M) 452.7 436.1 411.0 376.4 308.4 259.1Stock Rel Strgth Rel Strgth Gross Income ($M) 216.5 208.6 194.7 176.8 144.4 123.7Gain Index Rank Depreciation ($M) 11.6 11.3 13.9 9.5 6.4 5.3
4 Week -3% 0.97 36% Unusual/Extra ($M) -- -- -- -- -- -- 13 Week 3% 1.03 61% Operating Income ($M) 39.6 35.7 19.9 34.0 27.4 17.926 Week 26% 1.26 80% Interest Expense ($M) 4.0 3.2 5.1 4.8 3.9 3.452 Week -12% 0.88 63% Pretax Income ($) 39.5 35.4 17.4 31.5 25.9 17.1
Net Income ($) 26.2 23.2 12.3 19.7 16.5 10.6Growth TTM 3 Year 5 Year Operating Cash Flow ($M) 15.3 4.4 0.3 (1.9) 29.6 (33.7)
Sales 7.5% 12.2% 15.3% Investing Cash Flow ($M) (94.5) (92.5) (11.4) (18.4) 10.1 (11.8)Net Income 97.0% 12.0% 4.3% Financing Cash Flow ($M) 79.2 87.9 11.1 19.7 (38.9) 45.0EPS Basic 56.0% 6.1% 0.8% Net Cash Flow ($M) (0.3) (0.2) 0.0 (0.6) 0.8 (0.5)EPS Dil Cont 57.8% 5.8% 0.8% EPS Basic ($) 1.42 1.35 0.84 1.36 1.13 0.73Dividends 0.0% 17.0% -- EPS Diluted Cont ($) 1.42 1.34 0.84 1.36 1.13 0.72
Dividends/Share ($) 0.08 0.08 0.07 0.06 0.05 0.00Est Surprise EPS % Surp SUE Score Free Cash Flow Share ($) 0.06 (0.26) (0.83) (1.46) 1.07 (3.08)
1/14/2003 $1.14 3.60% 2.00 Cash ($M) 0.3 0.3 0.5 0.5 1.1 0.2Quarterly Annual Annual Goodwill/Intangibles ($M) 5.0 5.0 5.0 5.5 6.0 6.4
EPS Estimates 3/2003 12/2003 12/2004 Total Assets ($M) 513.2 447.9 452.6 319.7 274.3 267.9
# of Estimates 3 4 4 Long-Term Debt ($M) 74.2 115.4 0.7 48.4 28.2 67.0Current $0.19 $1.47 $1.67 Total Liabilities ($M) 212.8 168.3 230.1 108.6 82.4 89.4Week Ago $0.19 $1.47 $1.67 Book Value/Share ($) 16.14 16.34 15.35 14.61 13.15 12.21Month Ago $0.19 $1.47 $1.67 Avg Shares Outst'g (M) 18.6 17.1 14.5 14.4 14.5 14.6
Source: AAII Stock Investor Pro, Market Guide and I/B/E/S. Data as of 3/31/2003.
Friedman's Inc. (FRDM) is the #3 retail jewelry chain in the U.S., behind Zale’s and Signet’s Sterling Jewelers. The company operates 650 Friedman's Jewelers stores in 22 states, mostly in the southern and eastern US; most stores are located in shopping centers anchored by mass merchandisers such as Wal-Mart or Target. The company offers its customers competitive prices, a broad selection of merchandise and a high level of customer service. It targets low- to middle-income consumers, ages 18 to 45, and provides them with a selection of diamonds, gold, gemstones and wedding-related items tailored for their market. The company's credit programs are an integral part of its business strategy. Friedman's generated approximately 53% of its net merchandise sales in fiscal 2002 through its proprietary credit program. The company's credit customers are encouraged to make monthly payments in person at the store, allowing sales associates to build personal relationships with its customer base and encourage additional purchases on a more frequent basis.
Friedman's passed the Group 2 screen, which looks for reasonable price multiples relative to interest rates, positive earnings growth, a history of dividends, and reasonable liquidity and debt. FRDM has a current P/E ratio of 6.8 based on current EPS of $1.42. The consensus earnings estimate for fiscal year 2003 is $1.47, and is $1.67 for the 2003 fiscal year. The most recent quarterly earnings came in at $1.14 on a normalized basis, which exceeded expectations by 3.6%. However, it was 9.5% below normalized EPS for the same quarter one year ago. Historically, earnings have grown at a 5.8% annual rate over the last three years. The consensus expected long-term growth rate is 15%. Freidman's current dividend yield is 0.9%. Friedman's percentage of liabilities to assets is 41.5%, below the 58.4% median for its industry.
Apr1998
Oct1998
Apr1999
Oct1999
Apr2000
Oct2000
Apr2001
Oct2001
Apr2002
Oct2002
$0
$5
$10
$15
$20
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AprilSSR.p65 4/4/2003, 9:53 AM9
10 APRIL 2003
Stock Superstars Report
SSR Group 3: Cooper Companies (COO) $29.90 ($31.47 - $19.18)
Group 3: Earnings MomentumDate Recommended: 4/4/2003
Recommended Price: Closing Price on 4/4/2003Primary Industry: Medical Equipment & Supplies
RiskGrade: 182
Market Cap: $934.8 Mil
Avg Daily Dollar Volume: $17.7 Mil
Multiples Current 10/2002 10/2001 10/2000 10/1999 10/1998
Price/Earnings 17.5 16.1 18.6 16.5 14.2 8.7
Price/Book Value 2.8 2.4 2.6 2.3 1.8 3.3
Price/Sales 2.6 2.4 2.8 2.3 1.8 3.3
Price/Cash Flow 14.8 13.1 14.3 12.7 10.3 7.6
Price/Free Cash Flow 31.5 25.6 87.1 19.1 18.5 nmf
Yield (%) 0.4 0.2 0.1 0.2 0.2 0.0Ratios Current 10/2002 10/2001 10/2000 10/1999 10/1998
Gross Margin (%) 63.1 63.3 65.4 66.2 64.9 62.1
Operating Margin (%) 21.0 21.2 23.4 23.3 23.1 20.2
Net Margin (%) 15.2 15.5 15.8 14.4 14.9 27.0
ROE (%) 17.6 17.2 16.3 16.0 16.2 31.0
ROA (%) 9.5 10.1 10.3 9.5 8.6 17.1
Current Ratio (%) 2.1 1.6 2.3 1.7 2.4 2.5
Payout Ratio (%) 2.9 3.1 2.4 3.9 2.2 0.0
Liabilities to Assets (%) 44.2 45.5 35.4 38.5 42.6 50.9
Asset Turnover (X) 0.6 0.7 0.7 0.7 0.6 0.6
Financial Statements TTM 10/2002 10/2001 10/2000 10/1999 10/1998
Sales ($M) 351.2 315.2 234.6 201.2 168.2 147.2
Stock Rel Strgth Rel Strgth Gross Income ($M) 221.5 199.5 153.4 133.1 109.2 91.4
Gain Index Rank Depreciation ($M) 1.6 1.5 5.2 4.2 3.8 3.6
4 Week 3% 1.01 65% Unusual/Extra ($M) -- -- -- -- -- --
13 Week 23% 1.25 86% Operating Income ($M) 73.7 67.0 54.8 46.9 38.9 29.7
26 Week 15% 1.10 70% Interest Expense ($M) 7.7 6.9 3.7 4.7 6.3 6.3
52 Week 28% 1.70 90% Pretax Income ($) 70.4 65.2 52.1 42.1 32.7 23.1
Net Income ($) 53.4 48.9 37.1 29.0 25.1 39.8
Growth TTM 3 Year 5 Year Operating Cash Flow ($M) 54.9 55.9 25.6 41.0 27.7 11.4
Sales 44.7% 23.3% 28.8% Investing Cash Flow ($M) (185.2) (155.1) (65.2) (40.6) 20.2 (59.3)
Net Income 32.5% 24.9% 9.3% Financing Cash Flow ($M) 134.2 96.3 38.0 (7.2) (34.6) 37.3
EPS Basic 30.6% 21.6% 5.4% Net Cash Flow ($M) 4.3 (2.7) (1.7) (6.3) 13.6 (10.9)
EPS Dil Cont 30.5% 26.8% -1.1% EPS Basic ($) 1.75 1.60 1.25 1.02 0.89 1.34
Dividends -28.6% 35.7 -- EPS Diluted Cont ($) 1.71 1.57 1.22 1.01 0.77 1.89
Dividends/Share ($) 0.05 0.05 0.03 0.04 0.02 0.00Est Surprise EPS % Surp SUE Score Free Cash Flow Share ($) 0.96 0.99 0.26 0.87 0.59 (0.27)
2/26/2003 $0.44 4.80% 1.00 Cash ($M) 12.1 13.1 20.9 14.6 20.9 7.3
Quarterly Annual Annual Goodwill/Intangibles ($M) 261.4 253.6 145.6 110.9 80.5 84.3
EPS Estimates 3/2003 12/2003 12/2004 Total Assets ($M) 597.0 571.1 396.8 322.6 285.9 296.0
# of Estimates 4 4 4 Long-Term Debt ($M) 159.0 127.3 60.6 40.3 57.1 78.7
Current $0.48 $2.05 $2.45 Total Liabilities ($M) 264.0 259.7 140.6 124.1 121.7 150.8
Week Ago $0.48 $2.05 $2.45 Book Value/Share ($) 10.77 10.19 8.64 6.99 5.82 4.90
Month Ago $0.47 $2.02 $2.43 Avg Shares Outst'g (M) 30.9 30.5 29.6 28.3 28.2 29.6
Source: AAII Stock Investor Pro, Market Guide and I/B/E/S. Data as of 3/31/2003.
Cooper passed the Group 3 screen, which seeks out companies with strong sales and earnings growth, a reasonable price-earnings ratio given the company's growth rate, and relatively strong price action. COO has a current price-earnings ratio of 17.5 based on a trailing 12-month earnings per share of $1.71. The consensus earning estimate for the 2003 fiscal year is $2.05, and is $2.45 for fiscal year 2004. Earnings have grown at 26.8% annually over the last three years, while revenues have grown 28.8% annually over the last five years. The consensus annual earnings growth rate is 20.8% over the next three to five years. COO’s stock price has outperformed the S&P 500 index by 70% over the last 52 weeks and it has outperformed 90% of all U.S.-traded stocks during the same time frame.
The Cooper Companies (COO) operates through its subsidiaries as a developer, manufacturer and marketer of healthcare products. Through CooperVision (CVI), the Company develops, manufactures and markets a broad range of contact lenses for the worldwide vision care market. It specializes in toric lenses that correct astigmatism, cosmetic lenses that change the appearance of the color of the eye and other lenses, primarily sold to high-growth, specialty and value-added market segments worldwide. Its products are disposable and planned replacement toric and spherical lenses. Subsidiary CooperSurgical (CSI) specializes in the women’s health care market and markets medical devices, diagnostic products, surgical instruments and accessories used primarily by gynecologists and obstetricians. The company markets its products through its own sales representatives in North America, distributors in Japan, and a mixture of both throughout Europe.
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AprilSSR.p65 4/4/2003, 9:53 AM10
APRIL 2003 11
Stock Superstars Report
SSR Group 4: Fresh Del Monte Produce (FDP) $15.25 ($29.70 - $14.71)
Group 4: Reasonably Priced GrowthDate Recommended: 4/4/2003Recommended Price: Closing Price on 4/4/2003Primary Industry: Consumer Non-CyclicalRisk Grade: 217Market Cap: $865.7 MilAvg Daily Dollar Volume: $6.3 Mil
Multiples Current 12/2002 12/2001 12/2000 12/1999 12/1998
Price/Earnings 4.3 6.1 5.8 10.7 12.9 11.8Price/Book Value 1.1 1.5 1.0 0.7 1.7 2.3Price/Sales 0.4 0.5 0.2 0.1 0.4 0.5Price/Cash Flow 3.3 4.6 3.5 3.9 7.2 8.1Price/Free Cash Flow 3.7 5.2 3.2 15.5 nmf 89.8Yield (%) 2.6 0.9 0.0 0.0 0.0 0.0Ratios Current 12/2002 12/2001 12/2000 12/1999 12/1998
Gross Margin (%) 16.1 16.1 14.7 9.0 8.6 12.2Operating Margin (%) 10.3 10.3 8.6 4.4 4.8 6.5Net Margin (%) 9.3 9.3 5.0 1.8 3.3 3.7ROE (%) 27.9 29.8 19.1 7.5 14.1 16.4ROA (%) 15.5 15.7 7.9 2.7 5.1 5.8Current Ratio (%) 1.3 1.3 1.5 1.6 1.9 1.8Payout Ratio (%) 5.6 5.7 0.0 0.0 0.0 0.0Liabilities to Assets (%) 39.9 39.9 54.8 62.6 65.0 63.0Asset Turnover (X) 1.7 1.7 1.6 1.5 1.5 1.6Financial Statements TTM 12/2002 12/2001 12/2000 12/1999 12/1998
Stock Rel Strgth Rel Strgth Sales ($M) 2,090.5 2,090.5 1,928.0 1,859.3 1,743.2 1,600.1Gain Index Rank Gross Income ($M) 336.7 336.7 282.9 166.9 150.6 194.7
4 Week -15% 0.83 13% Depreciation ($M) 0.0 0.0 3.4 3.4 2.6 1.713 Week -21% 0.80 19% Unusual/Extra ($M) 19.6 19.6 25.2 0.0 0.0 30.526 Week -36% 0.62 17% Operating Income ($M) 214.4 214.4 164.9 82.6 84.5 104.252 Week -18% 1.09 59% Interest Expense ($M) 15.7 15.7 32.1 43.2 30.2 30.3
Pretax Income ($) 219.9 219.9 122.7 36.0 71.6 89.6Growth TTM 3 Year 5 Year Net Income ($) 195.2 195.2 96.2 33.1 56.9 59.3
Sales 8.4% 6.2% 7.6% Operating Cash Flow ($M) 311.4 311.4 230.2 98.5 38.9 64.0Net Income 102.9% 50.8% 44.8% Investing Cash Flow ($M) (68.3) (68.3) (66.6) (81.2) (172.3) (69.1)EPS Basic 97.8% 49.2% 38.1% Financing Cash Flow ($M) (248.3) (248.3) (161.6) (37.7) 144.5 (48.2)EPS Dil Cont 100.0% 49.8% 30.5% Net Cash Flow ($M) (3.5) (3.5) 2.4 (20.6) 6.6 (52.9)Dividends -- -- -- EPS Basic ($) 3.54 3.52 1.79 0.62 1.06 1.11
EPS Diluted Cont ($) 3.58 3.56 1.77 0.62 1.06 1.44Est Surprise EPS % Surp SUE Score Dividends/Share ($) 0.20 0.20 0.00 0.00 0.00 0.14
2/11/2003 $0.55 71.90% 4.60 Free Cash Flow Share ($) 4.20 4.19 3.20 0.43 (1.15) 0.19Cash ($M) 9.5 9.5 13.0 10.6 31.2 32.8
Quarterly Annual Annual Goodwill/Intangibles ($M) 81.9 81.9 77.0 81.5 79.4 49.1EPS Estimates 3/2003 3/2003 3/2004 Total Assets ($M) 1,262.8 1,262.8 1,219.2 1,221.6 1,216.2 1,034.0
# of Estimates 4 4 2 Long-Term Debt ($M) 47.3 47.3 282.2 434.0 476.0 337.0Current $1.26 $3.72 $3.88 Total Liabilities ($M) 503.3 503.3 668.7 764.4 790.4 651.5Week Ago $1.26 $3.72 $3.88 Book Value/Share ($) 13.52 13.70 10.22 8.50 7.92 7.13Month Ago $1.27 $3.72 $3.08 Avg Shares Outst'g (M) 56.1 55.4 53.8 53.7 53.7 53.6
Source: AAII Stock Investor Pro, Market Guide and I/B/E/S. Data as of 3/31/2003.
Fresh Delmonte Produce passed the Group 4 screen, which looks for a combination of low price-earnings ratios, solid earnings growth forecasts, strong record of sales growth, and strong profitability relative to the industry norm. FDP has a current price-earnings ratio of 4.3 based on a trailing 12-month earnings per share of $3.58. Looking forward, the consensus earnings estimate for fiscal year 2003 is $3.72 and for 2004 is $3.88. Historically, earnings have grown at 30.5% annually while revenue has grown 7.6% annually over the last five years. The consensus annual earnings growth rate is 8.3% over the next three to five years. Free cash flow per share has risen over each of the last three years, as has the company's operating margin which, at 10.3%, is above the industry median of 6.1%.
Fresh Del Monte Produce (FDP) is primarily engaged in the worldwide sourcing, transportation and marketing of fresh and fresh-cut produce. While no longer related to Del Monte Foods, the company holds the license to use the name on fresh fruit that it grows, transports, and markets. The company's products include bananas, pineapples, cantaloupe, honeydew, watermelons, grapes, non-tropical fruits (including citrus, apples, pears, peaches, plums, nectarines, apricots and kiwi), plantains, Vidalia sweet onions and various greens. In January 2003, the company added tomatoes, potatoes and onions to its product offering. The company sources its products primarily from Central and South America and the Philippines as well as from North America, Africa and Europe and distributes its products in Europe, the Asia-Pacific region and South America. Non-produce businesses include third-party ocean freight containers, third-party plastics and box manufacturing, Jordanian
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poultry, and Argentine grain.
AprilSSR.p65 4/4/2003, 9:53 AM11
12 APRIL 2003
Stock Superstars Report
I N D I V I D U A LN
A M E R I C A NASSOCIATIO
I N V E S T O R S
OF
®
Published monthly by the American
Association of Individual Investors, 625
N. Michigan Ave., Chicago, IL 60611,
312-280-0170, www.aaii.com.
Annual SSR subscription, $199.
AAII’s Stock Superstars Report (SSR) is
not a registered investment adviser or a
broker/dealer. This report is issued solely for
informational purposes and should not be
construed as an offer to sell or the solicitation
of an offer to buy securities. The opinions and
analyses included herein are based on
sources believed to be reliable and written in
good faith, but no representation or warranty,
expressed or implied, is made as to their
accuracy, completeness, timeliness, or
correctness. Neither we nor our information
providers shall be liable for any errors or
inaccuracies, regardless of cause, or the lack
of timeliness of, or any delay or interruptions
in, the transmission thereof to the users. All
information contained in this report should be
independently verified with the companies
mentioned.
© American Association of Individual
Investors, 2003. The Stock Superstars Report
is a trademark of the American Association of
Individual Investors. This publication may not
be reproduced in whole or in part by any
means without prior written consent.
Printed in the U.S.A.
members of Congress questioned the
FDA’s approval of saline implants.
First Essex Bancorp’s relative price
strength weakened although the com-
pany reported an increase in earnings for
2002 of 21% and voted a $0.24 dividend
payable to stockholders of record as of
the close of business on 3/31/03.
R.J. Reynolds Tobacco reported fourth
quarter 2002 earnings that beat Wall
Street estimates but indicated 2003
earnings are likely to fall short of expec-
tations. In March, renewed concerns
about the U.S. Justice Department’s
charges against the industry were in the
headlines along with continuing rulings
against the industry in class action
lawsuits.
Since inception, the SSR portfolio
continues to outpace the Wilshire 5000
by 20.7% through the end of March. And
the SSR portfolio significantly outper-
formed the Wilshire with dramatically
less risk—35% lower. Year to date, the
Stock Superstars Report is down 3.5%,
equal to the Wilshire but better than all
the other benchmarks with the exception
of the volatile Nasdaq 100. The SSR
portfolio, however, is over 50% less risky
than the Nasdaq 100 index, down 34.6%
since SSR inception.
The market continues to fly through a
big, dark cloud of uncertainty and the
ride is extremely bumpy. Quite a few
stocks and industries have been jetti-
soned by investors in the turbulence.
SSR, through its diversified strategies,
continues to find new investment
candidates and sell stocks that have
been knocked about, but before they hit
the ground. Diversified strategies create
a diversified portfolio that is capable of
staying on course no matter how severe
the investment storm. And all storms
eventually pass. •
is currently under review at the FDA.
3/13/2003—Taro Pharmaceutical
Industries (TARO) reported that its U.S.
affiliate has received approval from the
U.S. Food and Drug Administration
(FDA) for its Abbreviated New Drug
Application for Etodolac Extended-
Release Tablets, in three strengths, 400
mg, 500 mg and 600 mg. According to
industry sources, 2002 U.S. sales of
extended-release 400 mg, 500 mg and
600 mg etodolac tablets totaled approxi-
mately $37 million.
3/20/2003—Renal Care Group, Inc.
(RCI) named investment banker William
Johnston as non-executive chairman,
following the death earlier in the day of
Sam Brooks, the prior chairman. The
firm said it will continue its previously
announced search for a new chief
executive.
3/25/2003—A U.S. Congressional
subcommittee that has probed invest-
ment banks and mutual funds turned its
attention to credit rating agencies,
including Moody’s Corporation (MCO).
The House of Representatives Capital
Markets Subcommittee said it will hold a
hearing on April 2 on a range of issues
involving Standard & Poor’s, the Moody’s
Investors Service unit of Moody’s Corp.,
Fitch Ratings and other agencies. One
issue to be examined is the potential for
conflict of interest posed by agencies
relying on fees paid to them by the
corporations whose credit they rate.
3/26/2003—Affiliated Computer
Services (ACS) was selected by the
Illinois Department of Public Aid to
operate the state’s child support central
collection and disbursement unit. The
contract, valued at $109 million, began
in January 2003 and will run through
June 2006—with the option to renew for
three years. •
SSR SSSR SSSR SSSR SSSR STOCKSTOCKSTOCKSTOCKSTOCKS INININININ THETHETHETHETHE N N N N NEWSEWSEWSEWSEWS
(continued from page 5)
(continued from page 2)
AprilSSR.p65 4/4/2003, 9:53 AM12
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