Friday, January 16, 2009

Buy of 50 Cyber/Starting Position in CSCO

In the small cap names recently acquired from the Magic Formula screen, I eliminated one from consideration, NGA, due to its exposure to environmental clean up issues, as discussed in more detail in its SEC filings.   W's News conference: Reflective or disingenuous?/Pickens on Oil/TECH TITAN VALUATIONS/LLTC /cramer

Since I was already familiar with Ciber (CBR), having made close to a $150 profit ($158.99 to be precise) on 50 shares earlier, I went ahead and bought that 50 back at 4.5 today. CBR: Summary for CIBER INC - Yahoo! Finance  I had forgotten about this one altogether.  It was a quickie in 2008 meant to be a trade at the time of purchase. I simply did not remember doing it or why.  One reason for writing this blog is to keep track of what I do and why I do it, because quite frankly I am forgetting more and more stuff as brain cells die in mass.

The description of Ciber's business is contained in the profile section of Yahoo Finance and does not need to be summarized here. CBR: Profile for CIBER INC - Yahoo! Finance  I am attracted to it based on its current valuation.   Trailing P/E is around 9, price to book is .59 and price to sales is .23. P.E.G. ratio is less than 1.CBR: Key Statistics for CIBER INC - Yahoo! Finance  Those are all good statistics in my book.  Earnings growth is slow but still in existence as of the last quarter.   The company has a lot of debt for its size.  According to its latest 10-q,  81 million was in a convertible senior debenture maturing in 2023 paying just 2.875% in interest ( page 9 of 10-q)   This is a busted convertible in that the conversion price is $13.64.  Another 96.8 million was part of its 200 million senior secured reducing revolving credit facility which is priced at between 0 to .25% over LIBOR "plus a margin that ranges from .75 to 1.75%"  for maturities 1 to 6 months.  Subsequent to September 30th, the company purchased an additional 28.2 million of the outstanding convertibles leaving 52.8 million outstanding.

Four analysts cover the stock and the consensus estimate of .55 for 2009 would show little growth over 2008.  While this is slow, it may look good compared to a lot of firms for 2009. Revenues for 2009 are estimated at 1.2 billion with a market cap now at around  275 million. 

I also took my first nibble at Cisco for the first time in a long time.  I am not comfortable in investing in tech companies until a recession hits, then I try to wait a year or so before starting to buy, when the prices are driven down to points where I can buy and feel comfortable waiting it out.   I have forgotten the price paid today but it was around the closing price of 15.82 and it was only 30 shares.   My entry into these names would make a turtle seem to be fast.  Other names on the list include MSFT, INTC, EMC, ORCL, HWP, ADBE,  AAPL, RIMM AND LLTC.  Sometimes I have bought SMH.    My last sell on that one was somewhere over 30 and I like using it to make a purchase in semiconductor stocks, but not now or this month or probably even this quarter.  It is a holder, a different form of ownership structure.
Holders have to be bought I believe in 100 share lots so I am unable to do one of my chicken trades.  So far, I am up to 40 EMC, 30 CSCO, 50 MSFT and 70 INTC.  Wow, that is just amazingly slow, feeble, wimpish, an insult to all chickens, and even embarrassing.

A discussion by me of Cisco would have no significance to anyone including me.  Suffice it to say I did review the analyst reports from Morningstar, Value Line, and S & P before tipping my toe back into it.  I find some comfort in their cash position and leadership positions in their products.  I will hold a position like this for years and may not be a seller until it doubles in price.  While earnings problems are likely to materialize in 2009, I do not ever recall buying this name at 11 times earnings either.  CSCO: Analyst Estimates for Cisco Systems, Inc. - Yahoo! Finance

Besides, at least these tech companies have cash, a viable business and do not hire 20 million dollar a year bird brains to trade toxic and radioactive trash. 


  I am not a financial advisor but an individual investor trying to navigate my way through a difficult market. In these posts, I am acting as an unpaid financial journalist and an occasional political commentator.   I am also aggregating financial news stories that I view as important and providing any reader of these posts, assuming there are more than a couple, with links to those articles, sort of a filtered, somewhat intelligent, free search engine.  Any discussion made by me of particular securities  is not a recommendation to buy or to sell.  Trade at your own risk.  Consult with your financial advisor prior to making any purchase or sale. I will try to identify my sales too but it may take a few minutes after I implement them to create a post explaining my reasons.  The sale may before or after the post.  Before buying or selling any stock, even one recommended by a trusted financial advisor,  please research it and make up your own mind which is what I always try to do.  Research would include reading reports, reviewing financial records, earnings estimates, sec filings and prior earnings releases and news.  In this post, and all others by me, I am merely describing my reasons for purchasing  or selling securities, and the potential pitfalls that I identified prior to purchase or the reasons for a sale.  The securities mentioned in this and all posts written by me may not be suitable for others based on their unique financial position and risk profile.  Always read the prospectus before buying a Trust Certificate, bond, preferred stock or other bond or bond like investments.  Information contained in my posts has been obtained from sources believed to be reliable but cannot be guaranteed.  These posts by me do not constitute investment advice, nor shall they be construed as a guarantee of future results, or as an offer of any transaction in securities.   All content in these posts is provided for informational and entertainment purposes only, and it is a form of entertainment for me. 

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