The Proficient Investor

I know I talked about where I was going to sell Marvel and EMC at.

Marvel is reaping the rewards of its hard work for weeks now. Iron Man is going to continue raking in dough throughout the summer because word of mouth is much more powerful than Hollywood schmoozing is.

With Narnia opening now, the kid tickets are being siphoned there which steals a little of the Marvel thunder, but not long term. I think Narnia has the family crowd, but Marvel has Iron Man and The Hulk as well as The Watcher coming out this year which puts them in a very good situation to capitalize on the summer/fall market without really breaking waves.

That being said, i didn’t like the negativity on Wall Street regarding Marvel and sold out my position today below my long target price. What I’m looking for here is the parabolic market to crumble and the contrarian investors to get back on board with a $36 target. It’s already there in the earnings.I just want a bigger slice of the pie.

Apple, (AAPL) continues to grow at an alarming pace but providing much needed/wanted tech services. Didn’t anyone else see this coming? I’m a Star Trek fanatic and they basically had the iPod Touch before it was even invented. Gene Roddenberry was a genius and a visionary.

I sold 100 shares of EMC today at $17.50 for a small profit and I’m letting the remaining 50 shares ride. EMC should be a $20 stock. Why sell 100 now and let the 50 ride? I like to take gains on the way up instead of waiting for the top because tops (and bottoms) are hard to predict. It’s better to take the gain when you know the upswing is solid. Now I can play with house money and let my remaining shares ride out the wave.

I own shares of MVL, AAPL and EMC.

Sometimes it’s ok to be fully vested.

When you have a well diversified portfolio, you don’t always need to keep a reserve of cash especially when the dollar isn’t worth as much as it could be or has been in the past. When the dollar isn’t worth a lot compared to other currencies, you don’t make as much money from interest.

Finding a dividend paying stock is a good idea and finding good growth stocks that can pay off big is even better.

With that in mind I bought more shares of EMC two weeks ago because it was just too cheap given the growth. When you find a stock like this that should be trading at a much higher price and everything about the company looks good, you should pull the trigger.

Other stocks like this have been Apple (AAPL), Netflix (NFLX), Marvel (MVL), ACI. All of which I have traded and made money on.  The upside of choosing stocks with good growth (10% or more) is the target prices are easy to calculate. It’s harder with small cap companies but it can be done. I don’t like the buy and hold philosophy unless you can backup your hold decision with a good reason. Most people will agree a stock should be profitable when you buy it, not when you sell it. Figuring out the sell price before you buy is critical and will keep you from losing more often than not.

I own shares of Apple, MVL and EMC.

Shares of Marvel Entertainment Inc. (NYSE:MVL)are up on news that video game maker THQ Inc. (NYSE:THQI) has signed an exclusive worldwide licensing deal with Marvel. THQ will develop games based on the Marvel characters for all consoles and Windows PCs.

The first game is scheduled for a 2009 release.

The retail market has been extremely soft because of inflation fears and a slowing economy ( recession?). A falling dollar compared to the rest of the world doesn’t help either.

Given these situations, the numbers from Bluefly aren’t that bad. I expected a loss simply because money is too tight for most people to be squandering it on a Dolce & Gabanna dress or a Louis Vuitton handbag. So with that in mind, the figures reported are pretty good. Here’s the article from Business Wire

NEW YORK, May 07, 2008 (BUSINESS WIRE) — Bluefly, Inc. (NASDAQ SmallCap:BFLY), a leading online retailer of designer brands, fashion trends and superior value ( www.bluefly.com ), today announced strong growth in revenue for the first quarter 2008.

Highlights for the first quarter included:

– Revenue increased by approximately 14% to $25.2 million from $22.1 million in first quarter 2007;

– Gross profit increased by approximately 7% to $8.9 million from $8.4 million in the first quarter of 2007;

– Gross margin decreased by 250 basis points to 35.4% from 37.9% in first quarter 2007;

– Operating loss decreased to $2.9 million compared to $3.2 million;

– Average order size increased to $273.65 in 2008 compared to $269.21 in 2007;

– Net loss decreased to $2.9 million from $3.1 million. Loss per share decreased to $0.22 per share from $0.24 per share (based on 13.3 million weighted average shares outstanding after preferred stock dividends in 2008 and 12.9 million weighted average shares outstanding after preferred stock dividends in 2007, both adjusted for the 1 for 10 reverse stock split).

“I am encouraged by the first quarter results, given the softness of the overall retail environment,” said Melissa Payner, Bluefly’s CEO. “Although we made the decision to be somewhat promotional in the early part of the first quarter, we were encouraged by the growth we saw in the margin once we launched our spring collection.”

I own shares of Bluefly.

Last week I bought 35 shares of Marvel Entertainment Inc. (NYSE:MVL) because I know this summer is going to be a big one for the two films the company is releasing this year. Iron Man proceeded to break all box office estimates earning over $100 million in the opening weekend. Most analysts predicted $70-$80 million. I knew the film was going to be huge after seeing early footage at Wondercon in January.

Looking at the chart over the past few months it was essentially flat but showing resistance at $28. Once it broke through that barrier, I knew it would continue. Current estimates place the stock fairly valued at $36 which is where I have my GTC sell order.

Next year, Iron Man 2 is slated for production with a release in 2010 and two other films are in the works. Captain America and a new Avengers project. Things are looking good right now for Marvel. The self produced Iron Man has shown the industry that Marvel can deliver on its promises. The next big test is this summer’s The Hulk. Edward Norton leads a solid cast but audiences are still trying to recover from Ang Lee’s disastrous version starring Eric Bana and Jennifer Connelly.

If The Hulk is as successful as Iron Man has been, you just might see MVL top $40 this year.

Next on my sell block is Apple. I’ve been “schnitzeling” this one as it has run a lot, but I’m letting the remainder of my shares go to $200 where I think it should be based on earnings and this year’s outlook. Earnings actually point to a $201 stock price but I like to sell into strength instead of waiting for a “top”.

Microsoft withdraws their bid for struggling internet search company Yahoo! and the stock drops $4 or 15% on nearly 300 million shares traded.

This is exactly what I knew was going to happen. I can tell you that Yahoo shareholders are likely pissed and I wouldn’t be surprised if they get hostile over this.  Fans of yahoo of course think this is great but they don’t realize the underlying problems the company is facing. Internet search is no longer the hot ticket when it comes to dominating the market. Take Google for example. They aren’t focused solely on search anymore and have embraced many of the web 2.0 technologies like blogging, third party APIs and soon, the mobile phone market.

Google, unlike yahoo keeps reinventing itself by keeping up with what new devices are in demand and how people are using them.  I’m not talking about Google today though…I want to talk about how to make some money on Yahoo now.

Though I believe the company is in dire straits, this 15% plummet in price is good for contrarian style investors because it gives you an in.

Yahoo’s growth is around 19% and trades at 32 times earnings which is too low. It should be trading at38 times earnings giving you a price of about $29 where it was fair value before the Microsoft pullout.

That means you can buy it here 5 points down and probably make some money in the next couple weeks as it shakes out the unbelievers. I’d like to see it come back just a little more before buying it but $24 is a good entry and you can buy more on a dip. I’d look for a sell price of $29-$30 within 18 months.

Yesterday I got to thinking about the huge blockbuster season that happens in Hollywood every summer, and starts this month with the release of Iron Man.

May is traditionally the month the biggest films of the year come out. I’m talking about the huge movies like Transformers, Star Wars, and of course this summer’s Iron Man.

Marvel, the entertainment juggernaut behind Iron Man and also the upcoming The Incredible Hulk is set to make a killing on these two movies. The hype machine has been hard at work for Iron Man but not a lot has come forth about The Incredible Hulk except for a few interviews with stars Tim Roth and Edward Norton. Both films look amazing but what does it mean for Wall Street. Can Marvel make you some money this summer?

Marvel Entertainment Inc. (NYSE: MVL) is a multi-media company. They make movies, comics and video games. Most people are familiar with their Icons like Spider Man, The Incredible Hulk, The X-Men and Iron Man. They also license these properties out to video game makers and television producers. Franchising is a major part of any entertainment company and Marvel is going to cash in this summer. There’s both an Iron Man game and a Hulk game coming out and new comics for both of these characters are already on shelves.

The stock is trading at 18 times earnings and looking at about 10% growth over the next year. At $30 a share it’s nearing the 52 week high once again and should it break that level we could be looking at a $40 stock. The average 10 day volume is around 700k shares so its thinly traded and not very volitile. They also don’t pay a dividend but the 52 week low was only $21. With a 10 point swing in either direction this is a solid performer and I see a short term price of $32 before the stock is even value. I don’t normally recommend buying a stock after it has run as much as this has, but I do see some opportunity here for a quick profit.