Company name Broadcom Corporation
Stock ticker BRCM
Live stock price [stckqut]BRCM[/stckqut]
P/E compared to competitors Good

MANAGEMENT EXECUTION

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

ANALYSIS

Confident Investor Rating Good
Target stock price (TWCA growth scenario) $53.64
Target stock price (averages with growth) $80.72
Target stock price (averages with no growth) $70
Target stock price (manual assumptions) $42.56

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

Broadcom Corporation (Broadcom) is a global semiconductor solution for wired and wireless communications. Broadcom products seamlessly deliver voice, video, data and multimedia connectivity in the home, office and mobile environment. The Company provides system-on-a-chip (SoC), and software solutions. The Company's segment includes Broadband Communications, Mobile and Wireless and Infrastructure and Networking. During the fiscal year ended December 31, 2012, operates its business to serve three markets: Broadband Communications, Mobile and Wireless and Infrastructure and Networking. In February 2012, the Company acquired NetLogic Microsystems, Inc. In April 2012, it acquired BroadLight, Inc.

 

Confident Investor comments: At this price and at this time, I think that a Confident Investor can confidently invest in this stock.

If you would like to understand how to evaluate companies like I do on this site, please read my book, The Confident Investor.

Many people need to focus on not spending money on things that they do not need. This desire to spend, in some cases, has severely affected the ability to develop an Emergency Fund as well as create an investment portfolio. Even if you read my book, The Confident Investor, I cannot help you if you are not setting aside money on a regular basis to invest in your financial well-being.

I recently read an article on The Simple Dollar that helps with this problem. If you find that you (or members of your family) feel like money is burning a hole in your pocket, jump over and read this article. The two points that I thought were most interesting:

  1. Don't buy anything without coming up with 5 reasons to not buy it!
  2. Wait ten seconds before putting anything into your cart.

The article suggests 4 questions that you should ask yourself before every purchase:

  1. Can I find this exact item at a lower price elsewhere?
  2. Do I have something similar to this that’s unused or underused at home?
  3. Will I actually enjoy this?
  4. What’s wrong with this item?

It is a very good article. Jump over and learn how to control your spending urges.

Company name BlackRock, Inc.
Stock ticker BLK
Live stock price [stckqut]BLK[/stckqut]
P/E compared to competitors Good

MANAGEMENT EXECUTION

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

ANALYSIS

Confident Investor Rating Good
Target stock price (TWCA growth scenario) $373.27
Target stock price (averages with growth) $453.98
Target stock price (averages with no growth) $341.53
Target stock price (manual assumptions) $280.29

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

BlackRock, Inc. (BlackRock) is an independent investment management firm. The Company provides a range of investment and risk management services. The Company serves its clients as a fiduciary, and derives all of its revenues from client business. It invests in capital markets globally. Its clients include taxable, tax-exempt and official institutions (including pension funds, endowments, insurance companies, corporations, financial institutions, central banks and sovereign wealth funds) as well as retail investors and high net worth individuals. Its product range includes single- and multi-asset class portfolios investing in equities, fixed income, alternatives and/or money market instruments. In March 2012, it acquired Claymore Investments, Inc. from Guggenheim Partners, LLC. On February 14, 2013, BlackRock Inc sold its entire interest in Avocet Mining plc.

 

Confident Investor comments: At this price and at this time, I think that a Confident Investor can confidently invest in this stock.

If you would like to understand how to evaluate companies like I do on this site, please read my book, The Confident Investor.
 

On a regular basis, a company will announce a quarterly earnings number that is less than the analysts expected. This usually causes a large drop in the share price the following day.

So how do you protect yourself from these sudden drops?

  1. You should know the date of the quarterly updates for your major holdings. If you see the stock moving up for a few days before the announcement, you may want to take some of your earnings off the table and lock in your profits. You can always jump back into the stock if the price continues to move up. The opposite of this is also true, if you start to see the stock price drop for several days before a quarterly announcement, assume that insiders are getting out early and join them in leaving the company.
  2. You should setup your account to automatically get you out of a stock if it has a major price move. This should be standard practice for all of your holdings as it will protect you in the event that news breaks that adversely affects your holding or the market in general. Your broker should have a way of allowing you to do a conditional trade. A conditional trade should be set up like this: Sell 100 shares of XXXX as a market order if the price of XXXX drops over 7% in a single day. This order is different than a trailing loss order as it is only looking for a rapid drop in a single day rather than just a gradual decline over the course of time. You could have a trailing loss order of 10% but the conditional order will get you out faster if the stock is moving very rapidly due to bad news.
  3. If you are watching the quarterly announcement of your holding, you can easily check what the after hours trading is doing based on the news. If you see the stock has dropped, then you can let your conditional order save you. If you think the reaction is incorrect and you want to weather the short-term loss, you can log into your account in the evening, cancel your conditional order, and then replace the conditional order at about noon the following day after the market has stabilized. Most bad news will change the stock price in the first hour or two of trading if it is just going to be a quick correction. If the price is still rapidly dropping at noon then you may want to exit the stock as well, as the news is probably worse than you thought.

Company name Balchem Corporation
Stock ticker BCPC
Live stock price [stckqut]BCPC[/stckqut]
P/E compared to competitors Fair

MANAGEMENT EXECUTION

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

ANALYSIS

Confident Investor Rating Fair
Target stock price (TWCA growth scenario) $48.53
Target stock price (averages with growth) $56.04
Target stock price (averages with no growth) $41.76
Target stock price (manual assumptions) $46.22

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

Balchem Corporation (Balchem) is engaged in the development, manufacture and marketing of specialty performance ingredients and products for the food, nutritional, feed, pharmaceutical and medical sterilization industries. The Company has three reportable segments: Specialty Products, Food, Pharma & Nutrition, and Animal Nutrition & Health. The Company sells its products through its own sales force, independent distributors and sales agents. The Company operates five wholly owned domestic subsidiaries, such as BCP Ingredients, Inc., Aberco, Inc., Balchem BV, Balchem Trading BV and Balchem Italia Srl. The Food, Pharma & Nutrition (FPN) segment provides microencapsulation solutions to a variety of applications in food, pharmaceutical and nutritional ingredients to enhance performance of nutritional fortification, processing, mixing, and packaging applications and shelf-life. Balchem's Specialty Products segment operates in industry as ARC Specialty Products.

 

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. I am leaving this company on my Watch List since it barely missed a Good company rating. Also, my list is very low on industrials and I am hesitant to cut one at this time.

If you would like to understand how to evaluate companies like I do on this site, please read my book, The Confident Investor.