“Obama Stock” Trade for Friday — Navellier

By Travis Johnson, Stock Gumshoe, February 5, 2009

Here’s what Louis Navellier tells us in his latest teaser ad:

“Trade Preview!

“This ‘Obama Stock’ went from $8 to $60 in the last infrastructure build-out. Now it’s ready to do it again! Buy on Friday!

“I have found the Perfect Obama Stock–and I am releasing its name–and a doubler trade for it–at 5:30 p.m. EST, Friday, February 6.”

So I guess there’s no mistaking the message there, eh? Navellier’s copywriters cannot, at the least, be accused of being too subtle or equivocal.

The question for the great Gumshoe multitudes, however is “what’s the stock?” If Navellier is going to tell his subscribers to invest in it tomorrow evening, does it do us any good to learn what the stock is today?

I don’t know, of course — sometimes these Navellier picks pop for a day or two, sometimes they don’t. But I can dig into the clues and see if the mighty Thinkolator can tell you what the stock is …

Here’s some of Louis’ selling language:

“This tiny company sits at the crossroads of several Obama favorites, making it a double… maybe triple… winner in the trillion-dollar bailout bonanza.
» infrastructure build-out
» massive clean energy and clean environmental spending by Washington
» fast development of a smart transmission grid

“Examples in these areas: Martin Marietta Materials, Mohawk Industries and Dycom Industries are up 23% – 37% since November lows. That’s some of the market’s best returns. But alas, there are also analysts’ favorites for a stimulus play. So no bargains here.”

So we get the general idea — this is some kind of infrastructure company, probably engineering & construction or something along those lines. Some specific clues?

A PE of “under 10”

He explains that one of the reasons for the failure of the great fiberoptic buildout of the late 1990s was a lack of “trench-diggers” and backhoes … apparently this is a company involved in that, somehow.

“Our trench-digger soared from $8 in 1998 to $60 just before the tech bubble broke. Today it’s back down around $10 again–and ready for its next run… not to $60 perhaps, but the potential is there!”

Sales have risen 49% “in the past four quarters.”

Earnings are coming out on February 23. They earned 15 cents a share at this time last year, Navellier thinks they’ll earn $1.10 or more this time (for the year, I assume — he says the analyst estimate for this quarter is 26 cents), and raise their guidance.

For those who haven’t looked at Navellier’s stuff before, he’s all about quantitative analysis of the fundamentals — his system particularly focuses on stocks that beat analyst estimates and raise guidance, among other growth metrics (sales, earnings, etc.).

So … all this teasing is in service to Navellier’s Emerging Growth newsletter, which normally costs about $1,000 a year (assuming anyone ever pays the full retail price). He’s trying to grab new subscribers now with a three month subscription for $99, but that’s still some real money for most folks … so let’s see if we can identify the stock before you think about whether you want to subscribe. OK?

Right, then. Into the Thinkolator it all goes…

… a few moments on “pulse” … and voila! (or as my daughter puts it, Wa La!)

Louis’ top pick for tomorrow evening is MasTec (MTZ)

This is a company that has historically been focused on telecom infrastructure — digging those trenches, in Navellier’s words. The consensus analyst estimate is 26 cents a share for this quarter and was 15 cents for this quarter a year ago. $1.10 must be Navellier’s optimism creeping in, because the average analyst expects them to make just under a dollar for 2008 (and $1.11 in 2009).

And yes, they did enjoy the tech boom while it lasted — the shares did go from roughly $8 to $60 during the late 1990s before the bust, and the shares are right around $10 today. And just to complete the circle on those clues, they have shown 49% sales growth over the past year.

They were featured in Investors Business Daily last week, and they have made some efforts to diversify away from their heavy reliance on telecom companies with, among other things, acquisition of a builder of wind farms.

Will this one be a profitable investment? Analysts seem to think so — they’re predicting continued growth and it comes in with a Price/earnings/growth ratio of .81. Lots of growth companies have nice low PEG ratios these days, so it’s hard to say that “anything under 1 is a bargain” as we were wont to do back in the good ‘ol days, before Citibank and Bank of America became small caps (OK, that’s an exaggeration — they both still have market caps around $20 billion … but remember when they were fighting to see which could get to $250 billion first? Oooof).

MasTec is genuinely a small company, market cap around $750 million, with what looks like a reasonable amount of debt (about $175 million net debt — don’t know when it comes due). And while they are largely a telecom company there may well be a chance that they can profit from some infrastructure stimulus spending, if it appears — when you hear folks talk about one stimulus being a rollout of more broadband access to rural areas, that’s certainly a potential market for MasTec, and they do also have some smaller divisions in engineering, construction, and water work. I’d hesitate to say that they’re perfectly positioned, but they are at least in the kinds of businesses that are being talked about as part of a potential stimulus boom.

Is that enough? Well, that’s your call — they’re small, they’re profitable, they may have learned from their mistakes in the late 1990s (no guarantee on that), and it looks like Navellier will be recommending them to his readers tomorrow evening. Let us know if that piques your interest, or if you’ve a better idea to share with a comment below.


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13 Comments on "“Obama Stock” Trade for Friday — Navellier"

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A. Nony Mouse
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A. Nony Mouse
February 5, 2009 11:22 am

Gumsters-OMG!! “THE HORROR.. THE HORROR” check today’s IBD, page 7, article titled, “NEW ETF INTRODUCTIONS AND CLOSINGS”, RevenueShares Navellier Overall A-100 Fund, Released Jan 23d. Largest stock Holdings: McDonald’s, Express Scripts,Hess,Occidental Petroleum, General Mills, and Union Pacific.

TV Guy
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TV Guy
February 5, 2009 7:19 pm

Gee Mr. Navellier…I have set my watch and date on my other stocks…and they don’t seem to be responding. Do you work off Greenwich Mean Time…or U.S. EDT ?
:)::)::)::):
You gotta’ love their pitches, huh?

woody
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0
woody
February 5, 2009 8:17 pm

what’s behind this one from Stansbury:
On March 30, FDA results
we’ve waited 2 years to
receive could make you
$195,600, overnight

Tim
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Tim
February 5, 2009 8:53 pm

ummm. This may be a stupid question, but I’ll give it a go. Why is it so imperative that we buy this tomorrow? From what I’ve read, the only reason I can see this stock go up is because of it’s earnings. Their earnings won’t be announced until Feb. 23. So why not buy it on the 20th or 21st?

Hans Noll
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Hans Noll
February 5, 2009 10:52 pm

What are the “Instant stock rebates” by Kate Incontrera at Daily Reckoning?

coconnor55
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coconnor55
February 6, 2009 8:53 am

I love the way stockpickers pick their time periods in hindsight, or if they actually called those trades (both buy and sell), how they pick their best performers and don’t say anything about the dogs…

SageNot
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SageNot
February 6, 2009 9:06 am

The Yahoo board members who either work for MTZ or have invested in them don’t seem t/b that impressed with the company.

What could Louie know that they don’t know w/b my question?

http://finance.yahoo.com/q/bc?s=MTZ

When in doubt look for the trend no matter what these analysts state.

A. Nony Mouse
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A. Nony Mouse
February 5, 2009 11:24 am

Stock symbol is (RWW) for those who ms do futher research.

Gravity Switch
Admin
11
February 5, 2009 11:44 am

Interesting — I had heard he had some ETFs coming based on his quant strategies. He’s had traditional mutual funds for quite some time, it’s hard to describe their performance charitably (they’re mostly ranked one or two stars from Morningstar).

A. Nony Mouse
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A. Nony Mouse
February 5, 2009 11:32 am

Mea Culpa– my eyes aren’t what they use ta be…the symbol is RWV

Gravity Switch
Admin
11
February 5, 2009 9:02 pm

Because he says so?

Just kidding. Sort of. There’s nothing about the company that’s specifically happening tomorrow, as far as I know, I assume that tomorrow evening is just the regular time that his newsletter comes out, so that’s when he’ll be releasing this “secret” pick to his subscribers.

SageNot
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SageNot
February 6, 2009 9:18 am

http://finance.yahoo.com/q/ta?s=ARNA&t=1y&l=on&z=m&q=l&p=m50,m200&a=m26-12-9&c=

We had a discussion earlier in the week about this pick Woody. Looks even better today, but what do I know?

TV Guy
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TV Guy
February 7, 2009 7:56 pm

ah…c’mon Gummie

….you’re not going to let people in on the Special Horoscope Crystal Ball that Navellier has ??? Gee I was starting to make an acronym with that title….I think I had a good start…..

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