Category Archives: CHRW

YoY: Robinson Worldwide

Below is a chart of C.H. Robinson Worldwide (CHRW) from 1998 to 2019 reflecting the year-over-year (YoY) percentage change.

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C.H. Robinson Worldwide 10-Year Targets

Below are the valuation targets for C.H. Robinson Worldwide (CHRW) over the next 10 years. Continue reading

Nasdaq 100 Watch List: March 27, 2015

Performance Review

Below is the performance of the nine stocks from our March 14, 2014 Nasdaq 100 watch list compared to the performance of the Nasdaq 100 Index gain of +20.50% over the last year.

symbol Name 2014 2015 % chg
CTSH Cognizant Technology Solutions 50.25 63 25.37%
CHRW CH Robinson Worldwide Inc. 51.14 73.03 42.80%
SYMC Symantec Corporation 20.16 23.35 15.82%
SPLS Staples, Inc. 11.3 16.11 42.57%
CTRX Catamaran Corporation 45.87 48.32 5.34%
MAT Mattel, Inc. 37.28 22.61 -39.35%
CSCO Cisco Systems, Inc. 21.35 27.13 27.07%
average 17.09%

The listed stocks only averaged gains of +17.09% in the last year.  However, the top five stocks averaged gains of +26.38%.  The two top performing stocks, CH Robinson Worldwide and Staples, were highlighted as being of interest to as the time (we bought shares of CHRW).  Of CHRW, we said the following:

“According to Edson Gould’s Altimeter, Robinson Worldwide is trading at an equivalent price to the 2009 low.”

The Altimeter appeared to reflect the fact that the stock was reasonably valued.  CHRW was up as much as +50% in the last year.

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Regarding Staples (SPLS), we said:

“After bottoming in the last half of 2012, Staples increased by +52% before collapsing to the current level.  Dow Theory suggests that this is a classic retest of the prior lows.”

Since the March 2014 posting, Staples (SPLS) has increased as much as +68%.

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Nasdaq 100 Watch List

Nasdaq 100 Watch List: February 6, 2015

Performance Review

Below is the performance of the six stocks from the February 21, 2014 Nasdaq 100 watch list compared to the Nasdaq 100 Index gain of +15.46%.

Symbol

Name

2014 2015 change
SYMC Symantec Corporation $20.53 $24.77 20.65%
MAT Mattel, Inc. $35.55 $28.22 -20.62%
CHRW CH Robinson Worldwide $54.12 $70.51 30.28%
FAST Fastenal Company $45.61 $42.33 -7.19%
SPLS Staples, Inc. $13.09 $16.57 26.59%
CSCO Cisco Systems, Inc. $22.13 $27.24 23.09%

The average gain for all of the stocks was +12.13%.  Symantec (SYMC) was the stock of interest at the time.  Our thoughts on SYMC were, “…we don’t see why the stock couldn’t decline a bit further until April or May.” In fact, SYMC declined as low as $17.95, a drop of –12.57%.  However, the final low occurred in late March instead of the April/May projection.

At the time of the posting from last year, we outlined the analyst estimated price change for six stocks on our watch list.  The projections were as follows:

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The actual performance after one year is displayed below.

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On the whole, it appears that the analysts were correct about the overall trend for the stocks on our watch list.  two of three were (MAT, CHRW and FAST) were expected to be a mixed bag while three of three (CSCO, SYMC and SPLS) were expected to have price increases.

February 6, 2015 Watch List

Below are the 14 Nasdaq 100 companies that are on our radar.  As readers know, we have recently  taken a sizable position in one of the stocks on this list.

Nasdaq 100 Watch List: January 9, 2015

Performance Review

Below is the performance of the seven stocks from the January 10, 2014 Nasdaq 100 watch list compared to the performance of the Nasdaq 100 Index in the last year.

Symbol Name 2014 2015 % change
ALTR Altera Corp. 31.47 36.96 17.45%
SHLD Sears Holdings 36.71 34.3 -6.56%
GOLD Randgold Resources 61.57 74.91 21.67%
MXIM Maxim Integrated Products 28.15 32.99 17.19%
CHRW CH Robinson Worldwide 57.7 72.06 24.89%
EBAY eBay Inc. 52.16 55.63 6.65%
FAST Fastenal Company 47.7 45.99 -3.58%
  Average change 11.10%
         
  Nasdaq 100     18.18%

As a group, the stocks on our list underperformed the Nasdaq 100 by a wide margin. The first five stocks on our list averaged a gain of +14.92%.  Two stocks that we took positions in at the time were Altera (ALTR) and Randgold (GOLD).

Analyst Review

The chart below is what the analysts suggested the stocks would do…

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…This is the graphical representation of what actually happened.

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The observation of the data should be clear, the analysts expected declines for the coming year and the opposite occurred.  The projections were that Randgold (GOLD) would decline by nearly –50% and the stock increased by +21.67%.  From our perspective, the analysts provide a reasonable sound board for what to anticipate, as has been demonstrated with our Canadian and U.S. Watch Lists.

Nasdaq 100 Watch List: January 9, 2015

Below are the nine Nasdaq 100 companies that are on our radar.

Nasdaq 100 Watch List: December 26, 2014

Performance Review

The December 6, 2013 watch list contained the following companies and resulted in the accompanying 1-year results:

Symbol 2013 2014 % change
CTRX 44.99 51.93 15.43%
ALTR 32.12 38.27 19.15%
ISRG 377.38 531.24 40.77%
MXIM 28.46 31.65 11.21%
CHRW 57.89 76.75 32.58%
EBAY 52.01 57.04 9.67%
EQIX 165.48 232.76 40.66%
GOLD 65.44 66.26 1.25%

The companies on our watch list from last year gained an average of +21.34% as compared to the Nasdaq 100 which gained +23.11%.  Our analyst estimate section of the watch list from last year shows what the stock on our list were expected to do over the following 12 months.

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All of the stocks were expected to decline in value, overall.  However, what is most striking about the one year performance is that while companies on the far left were expected to do the worst those on the far right were expected to the best (sort of).  Below is the actual one year performance:

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A side by side comparison will demonstrate that (again) the trend of performance favors those stocks that have been pinned with the worst expectations.

Nasdaq 100 Watch List: December 26, 2014

The following stocks are on our radar and should be on yours:

Nasdaq 100 Watch List: December 5, 2014

Performance Review

Below is the watch list from December 6, 2013 and the subsequent performance over the last year:

Symbol Name 2013 2014 % change
CTRX Catamaran  44.99 51.25 13.91%
ALTR Altera Corp. 32.12 37.93 18.09%
ISRG Intuitive Surgical, Inc. 377.38 508.86 34.84%
MXIM Maxim Integrated 28.46 31.36 10.19%
CHRW CH Robinson Worldwide 57.89 74.63 28.92%
EBAY eBay Inc. 52.01 54.81 5.38%
EQIX Equinix, Inc. 165.48 231.68 40.00%
GOLD Randgold Resources 65.44 64.85 -0.90%
Average change 18.80%
Nasdaq 100 Index 23.04%

Below is the chart of analyst estimated returns from December 6, 2013 compared to the performance one year later:

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In the example above, we see that, in general, the stocks performed in opposition to what analysts had anticipated.  It is important to note that we routinely recommend that investors consider the stocks that have the worst prospects first based on analyst estimates.  After appropriate due diligence, stocks deemed unacceptable risks should be eliminated.

As has been the case for some time, analyst estimates have fallen far from the mark when assessing the prospects for stocks.  At the time, Equinix (EQIX) was considered by analysts to have the worst prospects.  As it happens, Equinix managed to gain the most among the stocks that we tracked last year.  For our part, we had EQIX on our radar as early as July 26, 2013.  We said the following of the stock:

“A stock that is establishing a significant technical pattern is Equinix (EQIX).  It seems that Equinix is developing a ‘head and shoulder’ formation.  this suggests that a further decline below $176 will result in a minimum decline to the conservative downside target of $158.37.  We would consider a review of EQIX fundamentals at or below $110.”

Our concern for downside risk resulted in being too cautious.  However, after our July 26, 2013 commentary, EQIX declined from $183.75 to the Edson Gould SRL conservative downside target of $158.37.  Once achieving the low at $155, EQIX started to make the long climb higher.

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Nasdaq 100 Watch List: December 5, 2014

The following are the stocks that are on our watch list with Analyst Estimates:

Nasdaq 100 Review

Below is the one year performance of our August 23, 2013 Nasdaq 100 Watch List stocks (8/23/2013 to 8/26/2014):

Symbol Name 2013 2014 % change
SHLD Sears Holdings Corp 39.6 34.67 -12.45%
EQIX Equinix, Inc. 170.01 217.25 27.79%
TEVA Teva Pharmaceutical 38.3 52.22 36.34%
CHRW Robinson Worldwide 57.2 68.45 19.67%
EXPE Expedia Inc. 48.84 87.43 79.01%
NUAN Nuance Comm. 19.31 17.17 -11.08%
MXIM Maxim Integrated 27.71 30.91 11.55%
BRCM Broadcom Corp. 25.24 38.81 53.76%
ISRG Intuitive Surgical 390.09 478.68 22.71%
NWSA News Corporation 15.75 17.62 11.87%
Avg. % change 23.92%
NDX Nasdaq 100 Index 30.26%

The watch list of stocks gained +23% versus a gain of +30% in the Nasdaq 100 Index.  The best performing stock, with gains of +79%, was Expedia which was a strong interest stock featured on our July 26, 2013 watch list.  At the time, we said the following:

Travel website operator Expedia (EXPE) has suddenly dropped in on our watch list with a –27.38% decline in the stock price on Friday July 26, 2013.  We’re not sure that a –28% decline in quarterly earnings requires a –27% decline in the stock price.  This type of activity suggests that since June 2012, investors had not sufficiently assessed the prospects of the company before acquiring the stock.  Extreme swings in the price indicate that there is more downside risk.

Applying Edson Gould’s Speed Resistance Lines gives us a conservative downside target of $42.56 and an extreme downside target of $22.70.

Our expectation is that there is a good chance that Expedia will decline to the $34 level.  Once falling below $34, Expedia should be reviewed on a fundamental basis as a going concern.  There may be significant opportunity for this stock as the performance has been in line with industry competitors.

As is often the case, we were too conservative in believing that EXPE would achieve the rising $34.00 level.  Instead, EXPE fell exactly to the rising $42.56 level and moved higher from there (updated chart below).

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Another strong interest stock in the same July 26, 2013 posting, Equinix (EQIX) also fell only as low as the conservative downside target.  From the peak price of $229.02, EQIX spent only four trading days below $158.37.  It has been nothing but an uphill climb since.

The worst performing stock was Sears Holdings (SHLD).  Sears has essentially traded with descending peaks since 2007 with price support at around $30.  A break below $30 could result in significant loss for any remaining shareholders.  Private equity firms must be circling Sears at the prospect of a decline below the long-term support.

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The strong interest stock from the August 23, 2013 watch list was Maxim Integrated Products (MXIM). At the time we said of MXIM:

“The stock of most interest to us is Maxim Integrated Products (MXIM).  Maxim has had a great run since our March 20, 2010 highlight of the chip sector as potential investment candidates (found here).  In the chart below, since the 2008 trough, Maxim has maintained a consistent ability to rebound from the conservative downside target of $26.97.  However, if the stock cannot hold the line at $26.91, then we expect that the stock will fall to the $19.03 level.  The extreme downside target is $11.10, however, we don’t expected this to be achieved.  Potential investments at the current level along with stepped up amounts of capital at $19.03 and $15.87 is recommended.”

Since August 23, 2013, Maxim increased as much as +29.05% before falling to a 1-year gain of “only” +11%.  If we include the dividend of 3.80%, the total return would be +15% for the last year.  Below is the updated SRL for MXIM with new conservative and extreme downside targets.

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Although Maxim has fallen considerably since the June 2014 peak, we’re only willing to re-consider the stock after falling at or below the rising $27.79 level.

Investment Consideration

To put all of the gains (and losses) into perspective, we like to compare any profits with the historical market return.  Below are the annualized compounded annual growth rates (CAGR) for the last 50, 40, 30, 20 and 10 years (adjusted for inflation) [source].

years CAGR
50 5.90%
40 5.80%
30 8.42%
20 6.71%
10 6.67%

If an investor can achieve two times (2x) the 30-year CAGR in a single year, it is worth considering alternative investment opportunities while selling the principal and allowing the profits to compound in those stocks that pay a dividend.

Nasdaq 100 Watch List: August 1, 2014

Below is the performance of the six stocks from our August 9, 2013 Nasdaq 100 watch list (found here) compared to the Nasdaq 100 Index gain of +24.41% over the last year.

Symbol Name 2013 2014 % Change
BRCM Broadcom 26.06 38.19 +47%
CHRW Robinson Worldwide 56.79 67.7 +19%
EQIX Equinix 181.18 211.38 +17%
NUAN Nuance Comm. 19.11 17.83 -7%
SHLD Sears 41.35 37.27 -10%
ISRG Intuitive Surgical 391.87 453.17 +16%
average +14%
^NDX Nasdaq 100 Index +24.41%

The watch list underperformed the Nasdaq 100 by –10.41%.  However, the stock that we had a strong interest in, Broadcom (BRCM), garnered the following commentary:

“Broadcom (BRCM) tops our list this week and it is the stock that interests us the most, at the moment.  Right off the bat, we see that the stock has a price to book (P/B) ratio of 1.93.  Among the listed companies above, this is a compelling attribute.  Value Line Investment Survey says that the fair value for BRCM is 12 times cash flow.  Based on full year cash flow figures for 2012, BRCM is estimated to be fairly valued at $39.96 or +53% above to current price.

“Of concern with the data presented by Value Line is the fact that BRCM went from debt free in 2009 to nearly 15% of capital, as of the most recent reporting.  In one sense, corporate borrowing at low rates is a good thing.  However, we’re concerned that certain types of borrowing result in loss generating (is that possible) ventures that end up going nowhere.

“Broadcom has recently been slammed in the market based on reduced or declining guidance.  This from Investopedia.com:

‘A lot of what has worried Broadcom analysts and investors appeared to come home to roost with the company’s latest earnings report. Weak guidance has investors fearing that the company is losing more and more share to Qualcomm (QCOM), with an overall stagnation in high-end devices leading to fears that ASPs and margins are in danger. (Stephen D. Simpson. “Fear Dominating the Broadcom Story”. Investopedia. July 29, 2013. accessed August 10, 2013. link).’

“Dow Theory has the following downside targets:

  • $24.43
  • $20.61
  • $16.79
  • $12.97

“When we ran Edson Gould’s Speed Resistance Lines, we were only able to come up with an extreme downside target of $15.78.  It seems that the $24.43 target is highly achievable.”

On August 12, 2013 (one trading day later), our downside target of $24.43 was achieved on an intraday basis  as BRCM declined as low as $23.25.  After hitting our target low, BRCM trended higher to the tune of nearly +50% gains.

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It should be noted that in the 2013 article cited above, investors and analysts were fearful due to anticipated lower profit margins.  Please note that the NLO team does not operate by the maxim “be fearful when others are greedy and greedy when others are fearful” as made famous by Warren Buffett.  Instead, we think in terms of the words of Dow Theorist William Peter Hamilton, the fourth editor of the Wall Street Journal, when he said the following:

The best way of reading the market is to read from the standpoint of values. The market is not like a balloon plunging hither and thither in the wind. As a whole, it represents a serious, well-considered effort on the part of farsighted and well-informed men to adjust prices to such values as exist or which are expected to exist in the not too remote future. The thought with great operators is not whether a price can be advanced, but whether the value of property which they propose to buy will lead investors and speculators six months hence to take stock at figures from ten to twenty points above present prices.

“In reading the market, therefore, the main point is to discover what a stock can be expected to be worth three months hence and then to see whether manipulators or investors are advancing the price of that stock toward those figures. It is often possible to read movements in the market very clearly in this way. To know values is to comprehend the meaning of movements in the market.

Source: Hamilton, William Peter. Stock Market Barometer. Page 38.

At the current price, Broadcom almost appears expensive when considered from where we thought investors should take an interest.  However, on August 1, 2014, widely followed market commentator and analyst Charles Payne came out with an article titled “Is It a Good Time to Buy Broadcom?”  According to Mr. Payne Broadcom is a compelling buy at the current price with an upside target of $47.  We believe that our work has adhered to the recognition of values as outlined by Charles Dow and reiterated by William Peter Hamilton.

We consider ourselves value investors.  This means buying stocks at intrinsically low valuations and never selling, regardless of market conditions.  In theory, individuals who sell stocks in periods from several days to 10 years are considered traders.  However, a different reality pervades our market experience.  Lacking a vast pool of resources, we can only operate with an eye for values and downside risk.  For those with a similar reality, we can only advise the best scenario that would ensure that the pool of investment resources is guarded against buyers remorse.  With this in mind and the nearly +50% gains in BRCM, we recommend selling only the principal while letting the profits compound into perpetuity.  This is our only remedy to dealing with our own personal fear of loss.  We hope this will prove useful to others.

Nasdaq 100 Watch List: August 1, 2014

Below are the Nasdaq 100 stocks that we’re following along with estimated price projections for the remainder of the reported fiscal year:

Nasdaq 100 Watch List: August 23, 2013

Below are the Nasdaq 100 companies that are within 10% of the 52-week low. This list is strictly for the purpose of researching whether or not the companies have viable business models.

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