The First Ever DDO Investment Roundup (TFSM, FCSX, AMD, SRSL, Chinese ADRs/GDRs)

I've said many times that I wanted to increase content around individual companies on this site, but I've had a hard time following through. Generally, that's because my model is the kind of write-up I did for TSCM and CMG, which took days to complete, and if that's the bar, then this blog can't get written. So as the year proceeds, I'm going to try a few different options, one which is the "investment roundup," where I will run through things I'm seeing and hearing on a variety of investments. I'll leave comments open on these posts so readers can provide feedback. Emails are also welcome.

• First off, I want to share the website of Jason Raznick, who has been writing about some interesting ideas lately. Recent coups for Jason were his calls on 24/7 Real Media (TFSM) and aQuantive (AQNT). Both of these companies were acquired shortly after the Google-Doubleclick acquisition. The trend here was that both major technology companies (Microsoft) and old-school advertising agencies (WPP) realized they were either hopelessly behind the game in web advertising, or in danger of getting locked out of the market by the 900-pound gorilla in this space, Google. Other recent stocks include Iowa-based commodity broker FC Stone, which has the unique distinction of being the only market maker in ethanol futures.

• I like the look of AMD right now. The company has been absolutely clobbered leading up to, and through, the announcement of the company's worst quarter ever, and the stock has dropped from around $42/share to a recent low of $12.60. However, all is not lost: the company completed a $3bn financing, and AMD has a new chip coming out, the Barcelona series, raising the bar in the endless one-upmanship in the commercial server space. Even Fred Hickey, the ultimate bear, had guardedly positive things to say about Barcelona:

May 2007: Barcelona is expected to be significantly faster than Intel's quad-core offerings ... Barcelona will help AMD regain share at the higher-margin, high-end, putting Intel's forecast of improving gross margins in great jeopardy. If the economy's outlook wasn't so bad and if there wasn't such a tremendous excess of capacity at both Intel and AMD, I'd once again buy AMD's stock for a rebound.

• Another company I'm looking at is SRS Labs (SRSL), a company that makes surround sound audio technology for use in flat panels, set top boxes, automotive and other home audio equipment. A sample product would be SRS WOW, which is used to improve the performance of compressed audio. For a more complete list of products that currently use SRS technology, see here. The price/sales multiple is ludicrous, but the company is profitable, has huge profit margins (~30%) and is showing good growth. Micro-cap (~$200mm).

• After using Yahoo Finance for about six years, I am being won over by Google Finance. The number one differentiator in my experience is the ability to search on either a ticker symbol or the company name in the same search box and get the results you are looking for. Yahoo finance feels stale, and the beta charts function doesn't do much for me at all. Yahoo's constant admonishments of "ticker not found" also make the website feel ridiculous over time. Google's annotated flash price graphs with news, plus easy time scrolling ability are fantastic.

• I'm trying to compile a list of the most promising Chinese ADRs and GDRs out there. If you have any suggestions, drop me an email or post a comment. The best list I've seen so far is Fortune's China 100 list. Unfortunately, about 50% of the companies on the list are ORDs listed in Hong Kong or Shanghai. I'm thinking smaller/micro-cap stocks if you've got them.

Note: all references to investments on this site should not be interpreted as endorsements or recommendations for you to take action. Any investment actions you take as a result of something written here are your responsibility, so do your own homework.

Comments

[OilGasFutures.Com]

well i personally like UTSI (UTStarcom, Inc.) in the $7-8 Range, pretty low market cap so could pop pretty easily (disclosure, yes i own some)i like the whole china, india, oil, gas theme so this kinda fits into it, anyway----might be worth a look---Patrick Kerr OilGasFutures.Com

[Victor Cook, Jr., New Orleans, Louisiana]

Hi Ed,

I just discovered the DDO. It's a great read. Your take on why it's so difficult to include a lot of company specific content in a blog gives me some confidence that spending days on a single post is not just because I'm too obsessive, though that's probably true. It's also a very time consuming enterprise. See for example my comparison of Lew Platt's last five years, with Carly Fiorina's first five years, at HP: http://www.customersandcapital.com/.

[Mike Artherton]

Nice stuff... tough to keep track of all that is happening. I end up reading 100 odd blogs daily. Plus there is news. You could also enrich your blog by adding current news on your blog... try out the news widget from widgetmate.com