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Company name Mentor Graphics Corp
Stock ticker MENT
Live stock price [stckqut]MENT[/stckqut]
P/E compared to competitors Good

MANAGEMENT EXECUTION

Employee productivity Poor
Sales growth Good
EPS growth Good
P/E growth Poor
EBIT growth Good

ANALYSIS

Confident Investor Rating Fair
Target stock price (TWCA growth scenario) $22.76
Target stock price (averages with growth) $29.73
Target stock price (averages with no growth) $21.97
Target stock price (manual assumptions) $19.44

The following company description is from Google Finance: http://www.google.com/finance?q=ment

Mentor Graphics Corporation is a supplier of electronic design automation (EDA) tools – computer software and emulation hardware systems used to automate the design, analysis, and testing of electro-mechanical systems, electronic hardware, and embedded systems software in electronic systems and components. The Company markets its products and services worldwide, primarily to companies in the military and aerospace, communications, computer, consumer electronics, semiconductor, networking, multimedia, and transportation industries. The Company sells and licenses its products through its direct sales force and a channel of distributors and sales representativesThe electronic components and systems that the Company’s customers create with its products include printed circuit boards (PCBs), integrated circuits (ICs), field programmable gate arrays (FPGAs), embedded software solutions, wire harness systems, and computers. In January 2012, the Company acquired the Flowmaster Group.

 

Confident Investor comments: At this time, I think that a Confident Investor can cautiously invest in this stock as long as the price is correct. Most of the fundamentals of this company are good but there are some concerns.

 

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There will be a national holiday in the US next week on Wednesday, July 4th. This may seem obvious to anyone looking at the calendar but it is very important for investors.

Many professional investors will be on vacation all next week.  More importantly, their bosses will likely be on vacation next week.  Be careful of your investments during times when major mutual funds and investment companies have large percentages of their executives on vacation. Many of the trades will be on “autopilot” and the market volume is likely to be down.

As a habit, I rarely initiate a new position on a short work week.  Also, I never initiate a new position on the week of Thanksgiving or when the national holiday is on Tuesday, Wednesday, or Thursday. I even try to avoid the first work day after a 3-day weekend.

You may have a different experience but avoiding these shortened work-weeks has been good for my portfolio.

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I recently read an article on CNN Money advising investors to invest in consumer product goods (CPG) companies. The logic was that CPG companies, as a group, have several features that should be appealing to investors:

  • Predictability – these companies can predict how much of a product can be sold in the short-term so they control pricing and inventory well.
  • Dependability – these companies are not going to see massive drops in revenue since consumer purchase their products regardless of the economic climate.
  • Pricing power – due to their brand loyalty, these companies can put forward regular price increases with little negative market reaction.
  • Global reach – while most of CPG companies get the bulk of their revenue in the western world, many have made significant investments in emerging markets.

The problem with the article is that the cited companies were fair at best, and some were poor. Instead of the CPG companies in the article, I suggest that you look at good companies such as Coach [stckqut]coh[/stckqut], Decker [stckqut]deck[/stckqut], Boston Beer [stckqut]sam[/stckqut], or Fossil [stckqut]fosl[/stckqut] (all of these companies are currently on my Watch List). If you want to own one or two of the companies in the article, P&G [stckqut]pg[/stckqut] (the stock symbol is not PR as cited in the article) or Unilever [stckqut]ul[/stckqut] are decent candidates – both companies are very well run.

Settling for companies that are familiar to you and you see on the grocery shelves may not be a good investment strategy.  I suggest that you focus your portfolio on companies that have more upside potential but are still very well run.

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Company name Natural Resource Partners LP
Stock ticker NRP
Live stock price [stckqut]NRP[/stckqut]
P/E compared to competitors Fair

MANAGEMENT EXECUTION

Employee productivity Good
Sales growth Good
EPS growth Poor
P/E growth Good
EBIT growth Poor

ANALYSIS

Confident Investor Rating Fair
Target stock price (TWCA growth scenario) $31.53
Target stock price (averages with growth) $27.21
Target stock price (averages with no growth) $18.66
Target stock price (manual assumptions) $22.96

The following company description is from Google Finance: http://www.google.com/finance?q=nrp

Natural Resource Partners L.P. is a limited partnership. It is engaged principally in the business of owning, managing and leasing mineral properties in the United States. It owns coal reserves in the three United States coal-producing regions: Appalachia, the Illinois Basin and the Western United States, as well as lignite reserves in the Gulf Coast region. In February 2012, it acquired coal reserves at the Deer Run mine near Hillsboro, Illinois and approximately 9,500 net mineral acres located in the Mississippian Lime oil play in Northern Oklahoma. In March 2012, it acquired the rail loadout, associated infrastructure assets and a contractual overriding royalty interest on certain tonnage at the Sugar Camp mine near Benton, Illinois. In May 2012, the Company completed the acquisition of approximately 19,200 net mineral acres in the Mississippian Lime oil play in North Central Oklahoma.

Confident Investor comments: At this time, I think that a Confident Investor can cautiously invest in this stock as long as the price is correct. Most of the fundamentals of this company are good but there are some concerns.

 

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Company name Dril-Quip, Inc.
Stock ticker DRQ
Live stock price [stckqut]DRQ[/stckqut]
P/E compared to competitors Fair
MANAGEMENT EXECUTION
Employee productivity Poor
Sales growth Good
EPS growth Poor
P/E growth Good
EBIT growth Fair
ANALYSIS
Confident Investor Rating Fair
Target stock price (TWCA growth scenario) $52.86
Target stock price (averages with growth) $70.38
Target stock price (averages with no growth) $61.55
Target stock price (manual assumptions) $63.5

The following company description is from Google Finance: http://www.google.com/finance?q=drq

Dril-Quip, Inc. (Dril-Quip) designs, manufactures, sells and services offshore drilling and production equipment for use in deepwater, harsh environment and severe service applications. The Company’s principal products consist of subsea and surface wellheads, subsea and surface production trees, subsea control systems and manifolds, mudline hanger systems, specialty connectors and associated pipe, drilling and production riser systems, liner hangers, wellhead connectors and diverters. Dril-Quip’s products are used by integrated, independent and foreign national oil and gas companies in offshore areas worldwide. The Company’s operations are organized into three geographic segments: Western Hemisphere (including North and South America), Eastern Hemisphere (including Europe and Africa) and Asia-Pacific (including the Pacific Rim, Southeast Asia, Australia, India and the Middle East; headquartered in Singapore).

Confident Investor comments: At this time, I think that a Confident Investor can cautiously invest in this stock as long as the price is correct. Most of the fundamentals of this company are good but there are some concerns.