Advertising
DON'T BUY

Spoke to the CEO recently. Have a nice little business. Kind of a service provider to utilities and telcos. Write software pieces that help them send bills to their customers. The trouble is, they don’t have one source of revenue, sort of a patch of many different things. Also, they are capital constrained and need to raise money. It is hard to predict where the earnings are going to come from.

communications / media
DON'T BUY

Has been a tremendous success story. However, you have a CEO/founder that is leaving. People generally don’t leave when things are going well. If he had to guess, he would guess that the business has probably peaked along with the stock price. Even if the company continues to do well, the stock is probably going to start selling off.

clothing stores
COMMENT

Sold his holdings too early. Management is really solid. The overall business strategy of acquiring accretive companies still makes sense. Likes the way they fund themselves. They use a preferred share, which is redeemable, so they don’t dilute the common shareholders as much as other acquiring companies do. Hasn’t looked at this one closely lately. Typically you will do well in this scenario.

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DON'T BUY

His views have dimmed on this company. Cash is dying. You are probably better off owning Visa (V-N) or MasterCard (MC-N). The machine business they are into in North America is really mature and might even be shrinking.

other services
BUY on WEAKNESS

Insurance software providers. Used by insurance claims adjusters and is on a per use basis, so it will start to move when there are more natural catastrophes. This rarely goes below the $0.40 level. If you can pick it up in the high $0.30, or at $0.40, you are going to do okay.

Business Services
COMMENT

Electronic cigarettes are one of the most fascinating technological paradigm shifts that we have seen in a long time. These only have nicotine in them with no other chemicals so there are not the same negative health effects that there are in cigarettes. Thinks there is a lot of money to be made, and it’s a good place to be. CEO has about $200 million conservatively, of revenue lined up in his pipeline, through acquisition/distributions.

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PAST TOP PICK

(A Top Pick Dec 14/12. Up 7.39%.) Not the most attractive stock to be in right now. You have the tapering influence. Longer-term, for the more conservative investor, this is fine. You are going to have a lot of growth with all the infrastructure going on. As long as interest rates don’t shoot up too high, you’re going to be fine.

oil / gas pipelines