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Performance - Week Ending 11/29/2013

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December 01, 2013 – Comments (0) | RELATED TICKERS: MCS , GHM , GSM

 It was Thanksgiving the other day, a time for family and friends to gather together and give thanx. In my case, as it always is, it was an opportunity to give thanx for the people that are, and have been, in my life.

As we gathered I heard the sounds of a K.D. Lang CD. I can't remember the name of the CD but I know it has a Neil Young song on it. I always liked Neil Young, back in the day. He was to me, an artist, singing about what he knew and learning about new stuff so he could sing about that too. Kenny Chesney is like that.

Thanksgiving has always been about the people that I have had the great good fortune to know, those that I have had the privilege to work with, those that I have been blessed to watch retire, those that I have shared a story or two with, and those I have been allowed to laugh and sigh with as they recounted some life event.

My son made a movie several years back titled Purple Pastures. One of the characters in the film wondered what it would be like to walk sideways all day. I tried it once. It was different I admit and at first I thought it was just stupid. Then people I didn't know started asking me what I was doing and when I told them they would just smile.

Some people will read this and think I'm just some old hippy with no teeth, poor eyesight, and long stringy hair. So one of the other things I like to give thanx for are clueless axxholes that fall down stairs.

Hi. My name is Wax, and I am an individual, working class investor just trying to do the best I can in a world that was never intended for investors like me.

Throughout the course of the week, in addition to my regular job, I create baseline equity research valuations, principally for United States based companies in accordance with an All Cap Value investing philosophy.

The other thing I do is let the world watch as I manage the The Wax Ink Portfolio.

Perhaps watching me make the mistakes I make will help other working class investors avoid the investing pitfalls that constantly seem to find me.

Enjoy your weekend

Wax

Markets
The Wax Ink Portfolio was up 0.8% for the week. By comparison, the Dow was up 0.1%, the Nasdaq was up 1.7%, the S&P 500 was up 0.1%, the Russell 2000 was up 1.6%, and the Volatility Index, commonly known as the VIX, was up 11.7%.

Year to date, the Wax Ink portfolio is up 33.3%, the Dow is up 22.8%, the Nasdaq is up 34.5%, the S&P 500 is up 26.6%, the Russell 2000 is up 34.6%, and the VIX is down 10.1%.

Breakdown
The Wax Ink Portfolio breakdown remains unchanged with roughly 70% of the portfolio in equities, 30% of the portfolio in cash, and 0% of the portfolio in bonds.

Research
A great deal of time is spent every week looking for potential investments. Part of that research is listed below. Investment considerations are based on a long-term buy and hold value investing philosophy that considers investment risk before considering investment reward.

Xilinx, Inc. (Nasdaq: XLNX) – Negative Investment Interest (Sell) based on a recent price of $43.98 and a fair value estimate of $37-$43. Other investment considerations were a low y-o-y effective tax rate, declining y-o-y free cash flow growth, declining y-o-y earnings growth, increasing stock price.

Twin Disc, Inc. (Nasdaq: TWIN) – No Investment Interest (Hold) based on a recent price of $26.18 and a fair value estimate of $31-$36. Other investment considerations were poor management as highlighted by the decision to use company funds for stock buy backs instead of debt reduction, high leverage ratio, negative y-o-y earnings and free cash flow growth.

Standex International Corporation (NYSE: SXI) – No Investment Interest (Hold) based on a recent price of $59.08 and a fair value estimate of $51-$59. Other investment considerations were high goodwill/intangibles to total assets ratio, declining y-o-y earnings growth.

Alcoa, Inc. (NYSE: AA) – No Investment Interest (Hold) based on a recent price of $9.24 and a fair value estimate of $22-$23. Other investment opinion considerations were a high leverage ratio, declining y-o-y operational cash flow growth and a declining y-oy dividend.

Oil States International, Inc. (NYSE: OIS) – Negative Investment
Interest
(Sell) based on a recent price of $104.30 and a fair value estimate of $77-$89. There were no additional investment opinion considerations other than the current price relative the estimated value.

The Marcus Corporation (NYSE: MCS) – No Investment Interest (Hold) based on a recent price of $14.26 and a fair value estimate of $27-$31. Other investment opinion considerations were a high leverage ratio, an increase in debt growth, and negative free cash flow growth.

Graham Corporation (AMEX: GHM) – No Investment Interest (Hold) based on a recent price of $36.60 and a fair value estimate of $34-$40. Other investment opinion considerations were reduction of debt and free cash flow growth.

Global Specialty (Nasdaq: GSM) – Negative Investment Interest (Sell) based on a recent price of $17.83 and a fair value estimate of $11-$15. Other investment opinion considerations were a high leverage ratio, high net income from taxes, poor year-over-year earnings growth.

Rubicon Technology, Inc. (Nasdaq: RBCN) – Positive Investment
Interest
(Buy) based on a recent price of $10.01 and a fair value estimate of $19-$22. Other investment opinion considerations were the company's lack of debt and future demand for the company's products.

The Andersons, Inc. (Nasdaq: ANDE) – Negative Investment Interest (Sell) based on a recent price of $85.49 and a fair value estimate of $37-$46. Other investment opinion considerations were low operating margins, negative free cash flow, and excessive debt growth.

Holdings
This week's moving on up stocks were ultra capacitor king Maxwell Technologies (Nasdaq: MXWL), up 7%, industrial distributor L.B. Foster (Nasdaq: FSTR), up 7%, and drug maker Cubist Pharmaceuticals (Nasdaq: CBST) was up 5%.

This week's floaters in the bunch bowl were government specialty contractor Science Applications International (NYSE: SAIC), down 5%, iron ore digger upper Cliffs Natural Resources (NYSE: CLF), down 4%, and technical services contractor URS Corporation (NYSE: URS), down 3%.

Not Performing
The top portfolio choke and puke stocks are, soon to be taken private communications equipment company Tellabs, down 55% since being added to the portfolio, garage door and telephone headset maker Griffon Corporation, iron ore digger upper Cliffs Natural Resources, down 26% since being added to the portfolio, and garage door and telephone headset maker Griffon Corporation, down 28% since being added to the portfolio.

Portfolio Notes
Over the course of the next several weeks I will be evaluating the performance of the portfolio holdings. Traditionally, I focus on the holdings that have been in the portfolio the longest, stopping at holdings that have been in the portfolio less than 1825 days. But this year, given the current state of the economy, the entire portfolio is on the table.

Copyright © 2013 Wax Ink

Wax Ink is a baseline equity research company not licensed or registered with any government agency

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