I have a few thoughts to share with my favorite Irregulars today for our Friday File (we also shared a new article from Doc Gumshoe earlier today if you’re interested). Today we’re looking at a few trades I’ve made this week (four buys and one sell), updating thoughts on a couple companies I’ve covered before, and also noting the investment I didn’t make this week.
First, the transactions I’ve made with my personal account this week — as I mentioned I might do I sold my shares of Canyon Services (FRC.TO CYSVF) at around $11.50, following some optimism that drove the shares back up a bit and close to the top of its recent range (Canyon is up about 20% in the last three months and is not particularly expensive, but I think expectations are too high going forward). This means I’m closing out at a loss, personally, of about 10% on these shares, including dividends. You can see more of my thoughts on this one in last week’s Friday File, I am considering putting some of that money into C&J Energy Services (CJES) or perhaps another competitor (CJES and Canyon are both up roughly 2% over the last week), as I also mentioned last week, but with what I expect will continue to be pretty weak operational results from most of these North American land-based oil services companies for a while I’m not in a rush to get more exposure to that segment at the moment. There may be more disappointments and bargain prices ahead, particularly if the overall markets or natural gas prices suffer.
And I also made a small purchase just today, I bought my first position in Rosetta Stone (RST), the language learnings software company I wrote about as our “Idea of the Month” following the Value Investing Congress a few weeks ago.
Rosetta Stone is a growth story, not really a value story (yet, at least) based on cash flow or earnings, but there is a strong value argument to be made about the strength of their brand and their ability, following the ongoing turnaround and rationalization of marketing, to build that brand into a much larger company over time. This is a company that has very high name recognition and brand value thanks to their huge marketing spend over the years — and while that marketing spend didn’t translate into earnings in the way ...