A Michigan Company GNTX

Michigan playing Ohio State and thought I would do a study between time outs. This is a slow grower but has some upside potential in a long term portfolio. A Michigan company. Ugh. Michigan lost in double overtime. 

Gentex Corporation GNTX

Here is a Michigan company that makes America great and is solid "yeses" in the Better Investing universe with conservative estimates. They have a footprint in transportation, fire protection, defense and traffic safety. 
Here is a yahoo description of the company.

Gentex Corporation designs, develops, manufactures, and markets automatic-dimming rearview mirrors and electronics for the automotive industry; dimmable aircraft windows for the aviation industry; and commercial smoke alarms and signaling devices for the fire protection industry worldwide. It offers automotive products, including interior and exterior electrochromic automatic-dimming rearview mirrors, automotive electronics, and interior and exterior non-automatic-dimming rearview mirrors with electronic features for automotive passenger cars, light trucks, pick-up trucks, sport utility vehicles, and vans for original equipment manufacturers, tier one automotive mirror manufacturers, and various aftermarket and accessory customers. The company also provides photoelectric smoke detectors and alarms, audible and visual signaling alarms, electrochemical carbon monoxide detectors and alarms, and bells and speakers for use in fire detection systems in office buildings, hotels, and other commercial and residential establishments. Gentex Corporation sells its fire protection products directly, as well as through sales managers and manufacturer representative organizations to fire protection and security product distributors, electrical wholesale houses, and original equipment manufacturers of fire protection systems. The company was founded in 1974 and is headquartered in Zeeland, Michigan.

Positive Indicators:

1. Sales growth last five years 11%. It is a small/mid company with just over 1Billion in sales.
2. Pre-tax profit on sales was 27% and easily leads the industry.
3. Earned on equity though is 17.6% which is just average for the industry.
4. Historic earnings per share is greater than sales but not too drastic with 19.7%.
5. Dividend has gone from .24 to .36 over past five years but not more than 1/2 of earnings per share of $1.21.
6. Upside is 3.6 to 1.
7. This puts price in high of buy zone. Probably should wait for total market pullback before buying this. 
8. This is a President Trump stock. It will move with auto industry and defense spending.

Negative Indicators:

1. Market as a whole is due a pullback.
2. Insiders only have 3% ownership indicticating a bearish mood. 
3. It is at a 52 week high. 


We will buy 100 shares at yesterday's price. 

Bought 100 GNTX (a Nasdaq stock) @ $18.49. Cost basis $1,856.

PORTFOLIO TOTALS

GNTX cost $1,856.00 current $$1,849.00 .... -7.00
BNS paid $5,408 value $5,394 = -12.00
TSCO paid $6,667 value $7,461. = + 794.00
KMX paid $5,444 value $5,838= + 394.00
LCI paid $3,238 value $2,290 = - 948.00
JLL paid $9,699 value $10,019 = + 320.00

Paper gain since September of $539 or 1.67%. We will receive dividends and can absorb any pullback. Long term investments. Timers would sell some gainers but that is a poor strategy. We have good companies with good fundamentals so we forget fluxuations (volatility). Investing is a mindset and conviction. LCI is a mystery but still solid mathematically. We will see. 

THE BANK OF NOVA SCOTIA a little international flavor

THE BANK OF NOVA SCOTIA

The Bank of Nova Scotia provides various personal, commercial, corporate, and investment banking services in Canada and internationally. It offers financial advice, solutions, and day-to-day banking products, including debit cards, checking accounts, credit cards, investments, mortgages, loans, and related insurance products to individuals and small businesses; and commercial banking solutions comprising lending, deposit, cash management, and trade finance solutions to medium and large businesses comprising automotive dealers and their customers through a network of approximately 1,000 branches, 3,900 automated banking machines (ABMs), and commercial relationship managers. The company also provides a range of financial products, solutions, and advice to retail and commercial customers in Latin America, the Caribbean, Central America, and Asia primarily through a network of approximately 2,000 branches and offices, 4,600 ABMs, in-store banking kiosks, and specialized sales forces. In addition, it offers wealth management services through 100 offices, including asset management and advisory services for retail and institutional investors. Further, the company provides solutions to corporate, government, and institutional clients, which comprise corporate lending; transaction banking, including trade finance and cash management; investment banking, including corporate finance, and mergers and acquisitions; fixed income and equity underwriting, sales, trading, and research; prime finance comprising prime brokerage and stock lending; foreign exchange sales and trading; energy and agricultural commodities trading and hedging; precious and base metals sales, trading, financing, and physical services; and collateral management. It also offers its products through mobile, Internet, and telephone banking. The Bank of Nova Scotia was founded in 1832 and is headquartered in Halifax, Canada.

Why include international stocks? We are in a global community and international exposure provides a hedge against American volatility. This bank has been around since 1832. When interest rates go up in the US these stocks will benefit.

Well here are the Better Investing stats on this one. It is all yesses in our criteria.

1. It is a 12 Billion large capitalization company with 8.5% sales growth over 5 years.
2. It had pre-tax profit of 39% and is 10% above the industry average or 29%.
3. It earned 17% on stockholder's equity and surpassed its industry rate of 8%.
4. It earned 5% earnings per share a little less than sales.
5. It pays a dividend but within the acceptable parameters.
6. It is 9.5 to 1 which is an excellent upside downside ratio.

CONCERNS

1. 5% growth is low.
2. It may be a slow mover.
3. Change in NAFTA may hurt Canadian economy.
4. There may be better Canadian banks like The Bank of Canada.

We will invest in this company today in our educational portfolio.

We bought 100 shares of BNS @ $54.01 or $5,408 including $7 commission.

So where are we today on 100 shares of each?


BNS paid $5,408 value $5,401= -7.00
TSCO paid $6,667 value $7,375.00 = + 708.00
KMX paid $5,444 value $5,632= + 188.00
LCI paid $3,238 value $2,165 = - 1,073.00
JLL paid $9,699 value $10,048= + 349.00

So we have gains of $165 since September or .52% gain. We will watch and learn.

Jones Lang LaSalle

Jones Lang LaSalle 
www.jll.com






Jones Lang LaSalle Incorporated or JLL is a professional services and investment management company specializing in real estate. It is headquartered in Chicago, Illinois. They have 60,000 employees. They offer a range f real estate services, including agency leasing, project and development management/construction, capital markets, property management, corporate finance, real estate investment banking/merchant banking, energy and sustainability services, research, facility management outsourcing, strategic consulting and advisory services, investment management tenant representation , lease administration, transaction management, logistics and supply chain management, valuations, mortgage ordination and servicing, and value recovery and receivership services. The company also provides investment management services in institutional and retail investors, including high net worth individuals. It offers its services to real estate owners, occupiers, investors, and developers for various property types, including, cultural, educational, government, healthcare, laboratory, hotel hospitality and sports facilities; industrial, warehouse, office, residential, and retail properties.; critical environments, data, and transportation centers; infrastructure projects; military housing, and shopping mall.

This company was just bought by our Mustang Investment Club in October we paid $114.90.

Here are the statistics:

Positive Considerations:

1. 14.4% sales growth over the past five years. It is a mid capitalization company with 6 billion in sales in 2015.
2. Pre-tax profit on sales is 8.02% and that leads the industry average of 6.27%.
3. It has a 13.43% earned on stockholders equity that also leads the industry of 6.04%.
4. Earnings per share is 28.8% which is a little higher than sales. We like for it to be close to the same as sales. So this one is questionable. Not a deal breaker though.
5. It pays a .62 dividend which is less than half of earnings so they are spending on growth not tweaked to pay income.
6. The upside/downside ratio is invalid to 1 because the price is below the low end of the buy zone.
7. It is below the buy Zone at $96.98. The buy zone is $115-194 so it appears to be a bargain at this price.


Concerns:

1. They reported third quarter  EPS of $1.42 down from $2.56 last year and below adjusted estimates of $1.99.
2. Most analysts think this is an anomaly although they cannot explain what has happened.
3. In June of this year they acquired BRG ...the leading corporate Real Estate technology and management firm. This settled in July so not sure how this is going to factor into the bottom line. It is also a reason for the discrepancy in earnings and sales. Uncertainty.

We will purchase today 100 shares at 96.92. So we paid $9,699 with the $7 commission.

Here is where we stand:

TSCO $7,205 we paid $6,667 so gain of $538
KMX $5,689 we paid $5,046 so gain of $245
LCI $2,425 we paid $3,238 so loss of $813
JLL $9,692 we paid $9,699 so loss of $7

Loss of $30.

Tractor Supply More Than Tractors

I am writing this at McDonalds the day after the historic election. Since the rural white working class guys got out to vote without being surveyed by the pollsters I decided to tip my red cap to one of the places many of these do-it-yourself guys hang out.

It is none other than Tractor Supply. The ticker or symbol used to identify it on the Nasdaq Market is TSCO. How do you know it is listed on Nasdaq and not the Dow Jones Market the other trading marked used for stocks? It is the difference in 3 and 4. Nasdaq listed companies have 4 letters in the ticker and Dow companies have 3. That's it.

www.tractorsupply.com


TSCO has 1,575 stores in 49 states. Their mission is to supply the lifestyle needs of recreational farmers and ranchers and others who enjoy the rural lifestyle, as well as tradesmen and small businesses.

It meets all of our Better Investing criteria. Over the past five years:

1. Sales grew by 10.2% ... With 6 Billion with a B in sales it is a large cap company.
2. It leads the industry in pre-tax profit with 9.6% compared to a roughly 6% industry average.
3. It leads the industry in earnings on equity with 27.1% compared to 9%+ for the industry.
4. Earnings grew by 18.7%
5. Its upside downside ratio is 10.1 to 1. Anything over 3-1 is considered a good stat.
6. Its dividend has grown from .22 to .76 in those years. We are more excited about companies that don't pay a dividend so they spend cash on growth. It just increased its dividend to .96.
7. It is currently in the BUY zone at $66.60. The low of the zone is $60 and high $84.20.

Positive factors:

1. Last month it increased its pet supply inventory by purchasing Petsense. Pet food and supplies is a major industry.
2. The oil business will get a boost in a Trump presidency taking away some of the downward pressure on earnings created by energy dominated economies like Oklahoma.
3. It has a healthy 21.5 price to earnings ratio.
4. It just announced a stock buy back that will boost the stock price. A psychological move but usually not good long term.
5. It increased its dividend another move to boost the current price. Short term move. Positive if earnings and sales improve.

Negative factors:

1. It recently reported earnings with a warning that sales will not meet analysts expectations over the near term and cites economies in the south hurt by the downturn in the energy industry.
2. It just announced a stock buy back that will boost the stock price. A psychological move but usually not good long term. This is in both lists. Long term it is negative if earnings and sales don't turn around.
3. It increased its dividend another move to boost the current price. Short term move. A negative if downward trend continues more than two quarters from now.

So for our test portfolio we will put in a buy market order and buy 100 shares at $66.60 or $6,660.00 plus $7 to the brokerage company. Cost basis (our cost at settlement) is $6,667.00. We lose $7. Ha.

We have the following stocks since September 22:

LCI COST US $3,238 it is now worth $2,020 ugh so -$1,212
KMX COST US $5,451 it is now worth $5,046 ugh so -$405
TSCO COST US $6,667 it is now worth $6,689 yea so +$23

Markets as a whole corrected in October in anticipation of the election. LCI was hit by the FDA with a declassification of one of its drugs. That one may need to be sold but it will go in a good direction in a Trump administration. We will see. If LCI reports earnings that follow our criteria we just hold our ground. It not it gets a new home.