Wish list 2 -- ISRG, OLED, ERJ
If only I had an unending supply of funds coming in, then I could buy shares of all the companies I get excited about owning.
Even though I try to avoid some wide swaths of the market because they're already well represented in my mutual funds or retirement accounts and I can't compete with the analysts for information about them -- sectors like megacap companies, for example, or utilities or dividend plays for the most part (aside from some REITs) -- I still get tempted by some companies in those areas.
And in the area where I focus most of my energy, small and mid cap growth companies, the applicants for my portfolio seem to stream in almost endlessly.
I usually have funds available to make one or two investments a month, whether in companies I already own or in new candidates (most months, I try to do one of each -- it's another Lynchism, and I agree, that "the best stock to buy may be one that you already own"). Here are a few that have gotten me interested lately.
Intuitive Surgical (ISRG)-- man, do I wish I had bought this one last week. It has gone up almost 30% since their breakout earnings, and I winced all the way up as I checked my watch list in Yahoo Finance. I understand the principle that successful companies may never be avaialable at a market multiple, but fretting about whether to buy a company that has already gone up so much in a short period of time still gives me the shakes. Was turned on to this from one of my newsletter subscriptions (at the Fool), and it's taking me some time to really understand the company enough to buy in.
These guys make robots that allow for less invasive, more precise surgery. And while they're expensive machine, they also provide the service and ongoing software, etc., so they have more than just lumpy, one-time revenue. They appear to be in hyper-growth now, we'll see if I can convince myself that it's still OK to buy.
Cambridge Display Technology (OLED) -- you may have noticed that I own one of the intellectual property banks of the next phase of display technology, PANL (though I haven't written them up in detail yet). I'd like to own both (not including Kodak here, though they have important patents, because I don't like the larger business), since both of these businesses, churning money though they are today, have different technology approaches and may well both be successful in the long run. Universal Display (PANL) seems to be the best bet to take off first, since they've come close to putting a full spectrum PHOLED together (just developed the first blue pholed that meets manufacturing requirements, but it's not quite the right kind of blue for full color -- that's the primary reason for the most recent price bump, IMO). PANL also has already released a product in a mobile phone, and have some defense dept. contracts to develop really cool flexible displays for soldiers (and have added Samsung as a licensee, which brings some hope for future big business).
The different approaches of these two companies may well both pay off big, since OLED may well be better for big displays and PHOLED for portables. Both have great research operations and patents and show great promise. While I think PANL has great technology that we desperately need for portable devices to allow smaller toys that drain less power, and that puts them in the sweet spot right now to match the strongest need, I've read that OLED's technology might work better in the large, television size displays that we ought to see in a few years. So I've held off on buying OLED since it seems like I'll have some time before they reach the point where they have production contracts with manufacturers that might accelerate their earnings dramatically, hopefully I won't miss the boat on this one.
Embraer (ERJ) -- anyone who watches the market at all noticed Boeing's great earnings release recently. Airbus is getting solid orders for their mega plane, but Boeing's smaller new planes that promise greater efficiency are looking like a big hit. I think both companies will continue to be successful, but Boeing is already so over-covered by analysts that they're not going to surprise anyone too much in the long term.
Embraer rides the same trends, increased air travel worldwide and a focus on more efficiency, with smaller jets flying more frequent direct routes and less focus on overloaded 747s feeding hub airports. ERJ has the benefit of being under the radar for many folks, since they're Brazilian, and also having a nice low valuation since people discount for the sometimes frightening Brazilian economy and politics (I used to hold Petrobras for this same reason, though I sold a bit too early this past winter).
I think their well-priced smaller planes, which are already being used by many major carriers, will be very successful in the United States and elsewhere (with the corporate jet business providing some gravy). Even with the recent success of Boeing I think many investors overlook the good prospects for aerospace -- airlines are a terrible investment in most areas of the world thanks to competition and high oil prices, but their equipment suppliers should do much better if they can provide a better, more efficient product that helps them cope with fuel prices (kind of like how Toyota is selling Prius hybrids to us fuel-strapped Americans). Air travel is only increasing in the long term, and the world is becoming more connected -- China's catching up with the US's position as the world's largest consumer of air travel, and although I wouldn't buy a Chinese airline, I might buy an airplane manufacturer that could sell them some great planes.
My first wish list is still linked here, if you're interested. Or if you want to make a donation to enable my investment in any of these companies.
Even though I try to avoid some wide swaths of the market because they're already well represented in my mutual funds or retirement accounts and I can't compete with the analysts for information about them -- sectors like megacap companies, for example, or utilities or dividend plays for the most part (aside from some REITs) -- I still get tempted by some companies in those areas.
And in the area where I focus most of my energy, small and mid cap growth companies, the applicants for my portfolio seem to stream in almost endlessly.
I usually have funds available to make one or two investments a month, whether in companies I already own or in new candidates (most months, I try to do one of each -- it's another Lynchism, and I agree, that "the best stock to buy may be one that you already own"). Here are a few that have gotten me interested lately.
Intuitive Surgical (ISRG)-- man, do I wish I had bought this one last week. It has gone up almost 30% since their breakout earnings, and I winced all the way up as I checked my watch list in Yahoo Finance. I understand the principle that successful companies may never be avaialable at a market multiple, but fretting about whether to buy a company that has already gone up so much in a short period of time still gives me the shakes. Was turned on to this from one of my newsletter subscriptions (at the Fool), and it's taking me some time to really understand the company enough to buy in.
These guys make robots that allow for less invasive, more precise surgery. And while they're expensive machine, they also provide the service and ongoing software, etc., so they have more than just lumpy, one-time revenue. They appear to be in hyper-growth now, we'll see if I can convince myself that it's still OK to buy.
Cambridge Display Technology (OLED) -- you may have noticed that I own one of the intellectual property banks of the next phase of display technology, PANL (though I haven't written them up in detail yet). I'd like to own both (not including Kodak here, though they have important patents, because I don't like the larger business), since both of these businesses, churning money though they are today, have different technology approaches and may well both be successful in the long run. Universal Display (PANL) seems to be the best bet to take off first, since they've come close to putting a full spectrum PHOLED together (just developed the first blue pholed that meets manufacturing requirements, but it's not quite the right kind of blue for full color -- that's the primary reason for the most recent price bump, IMO). PANL also has already released a product in a mobile phone, and have some defense dept. contracts to develop really cool flexible displays for soldiers (and have added Samsung as a licensee, which brings some hope for future big business).
The different approaches of these two companies may well both pay off big, since OLED may well be better for big displays and PHOLED for portables. Both have great research operations and patents and show great promise. While I think PANL has great technology that we desperately need for portable devices to allow smaller toys that drain less power, and that puts them in the sweet spot right now to match the strongest need, I've read that OLED's technology might work better in the large, television size displays that we ought to see in a few years. So I've held off on buying OLED since it seems like I'll have some time before they reach the point where they have production contracts with manufacturers that might accelerate their earnings dramatically, hopefully I won't miss the boat on this one.
Embraer (ERJ) -- anyone who watches the market at all noticed Boeing's great earnings release recently. Airbus is getting solid orders for their mega plane, but Boeing's smaller new planes that promise greater efficiency are looking like a big hit. I think both companies will continue to be successful, but Boeing is already so over-covered by analysts that they're not going to surprise anyone too much in the long term.
Embraer rides the same trends, increased air travel worldwide and a focus on more efficiency, with smaller jets flying more frequent direct routes and less focus on overloaded 747s feeding hub airports. ERJ has the benefit of being under the radar for many folks, since they're Brazilian, and also having a nice low valuation since people discount for the sometimes frightening Brazilian economy and politics (I used to hold Petrobras for this same reason, though I sold a bit too early this past winter).
I think their well-priced smaller planes, which are already being used by many major carriers, will be very successful in the United States and elsewhere (with the corporate jet business providing some gravy). Even with the recent success of Boeing I think many investors overlook the good prospects for aerospace -- airlines are a terrible investment in most areas of the world thanks to competition and high oil prices, but their equipment suppliers should do much better if they can provide a better, more efficient product that helps them cope with fuel prices (kind of like how Toyota is selling Prius hybrids to us fuel-strapped Americans). Air travel is only increasing in the long term, and the world is becoming more connected -- China's catching up with the US's position as the world's largest consumer of air travel, and although I wouldn't buy a Chinese airline, I might buy an airplane manufacturer that could sell them some great planes.
My first wish list is still linked here, if you're interested. Or if you want to make a donation to enable my investment in any of these companies.
Labels: ISRG
This article posted by One Guy @ 8/01/2005 06:30:00 PM 0 comments
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