Looking for Wood at Sybil's Place

There is and old adage in the stock market, buy on the rumor, sell on the news. Every trading day, shares are bought and sold based on this adage and many others. Analysts issue sell ratings on stocks and the next day issue buy ratings on the same stocks. These analyst charge huge amounts of money for this guess work, and most of the time it is worthless.

As an individual investor, all of this market give and take is bullshit. To me, a stock should be bought because the markets, for whatever the reason, have decided that a particular stock is not worthy of investment. There are two things required to purchase a stock when the markets think it is large turd. The first thing required are stones. If you have never purchased shares of stock when the markets are in free fall, or when the particular stock you are purchasing is in that mode, it beyond scary, requiring stones to step up and flip the markets off.

The other thing required is some understanding of the value of the company the stock represents. Just what is the baseline value of the stock as an on-going concern? Just because the markets may be crushing the stock price, doesn't mean the value of the company has been compromised, right?

I do preliminary equity research, primarily for financial writers and private equity analysts. I do the work, they pay the bill, I send them the work. It is fairly straightforward. There are a couple of rules that I adhere to which are pretty easy to remember. If the company hasn't been public at least six years, don't ask. If the company is based in China don't ask. If you want the information based on a quarterly SEC filing, get the hell out of my face. As you can see, my work criteria rather limits the number of clients I have. Good for me is all I can say about that.

After I send the client the information they have requested I usually wait a couple of weeks and then post the worksheets on Wax Ink, or on some random blog site. You are more than welcome to search the site for a particular worksheet. If you do, the site sux. It is is virus free, but I haven't updated it in a very long time. The WORKSHEETS section if the most up to date. So feel free to wander through the suck hole that is the website.

This week's offering is Carpenter Technology Corporation (NYSE: CRS) which I have rated as a Sell because I believe the current market price is too high basis the current P/E, growth potential and balance sheet metrics. SEE RESEARCH NOTES

Enjoy...Wax